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11.19: Glossary: Perfect Competition

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    249389
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     entry
    the long-run process of firms entering an industry in response to industry profits
    exit
    the long-run process of firms reducing production and shutting down in response to industry losses
    long-run equilibrium
    where all firms earn zero economic profits producing the output level where P = MR = MC and P = AC
    marginal revenue
    the additional revenue gained from selling one more unit
    market structure
    the conditions in an industry, such as number of sellers, how easy or difficult it is for a new firm to enter, and the type of products that are sold
    perfect competition
    each firm faces many competitors that sell identical products
    price taker
    a firm in a perfectly competitive market that must take the prevailing market price as given
    shutdown point
    level of output where the marginal cost curve intersects the average variable cost curve at the minimum point of AVC; if the price is below this point, the firm should shut down immediately
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