177 Glossary: Perfect Competition (141/160) -- Microeconomics

177 Glossary: Perfect Competition 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