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An Industry with a Large Number of Relatively Small Firms

question 154

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An industry with a large number of relatively small firms producing _____ in a market with easy entry and exit is a(n) _____.


Definitions:

Price Effect

The impact on consumer behavior and purchase decisions resulting from a change in the price of a good or service.

Quantity Effect

The variation in overall income derived from altering the amount of a product sold, while keeping its price stable.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of a product or service.

Producer Surplus

The mismatch between the price point producers are prepared to accept for a good or service and the actual price they end up receiving.

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