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PERFECT COMPETITION, SHORT-RUN PRODUCTION ANALYSIS: A perfectly competitive firm produces the profit-maximizing quantity of output that equates marginal revenue and marginal cost. This production level can be identified using total revenue and cost, marginal revenue and cost, or profit. Because a perfectly competitive firm faces a perfectly elastic demand curve, it efficiently allocates resources by equating price and marginal cost. In addition, the marginal cost curve above the average variable cost curve is the perfectly competitive firm's short-run supply curve.
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TAX WEDGE The difference between demand price and supply price that is created when a tax is imposed on a market. Placing a tax on a market disrupts what otherwise would be an equilibrium equality between demand price and supply price. A tax wedge results because the tax is included in the demand price paid by buyers but not in the supply price received by sellers. With standard demand (negative slope) and supply (positive slope) curves, the incidence of the tax (who pays) is divided between buyers and sellers.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time wandering around the shopping mall trying to buy either a how-to book on home remodeling or a tall storage cabinet with five shelves and a secure lock. Be on the lookout for telephone calls from former employers.
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In the Middle Ages, pepper was used for bartering, and it was often more valuable and stable in value than gold.
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"If I have ever made any valuable discoveries, it has been owing more to patient attention than to any other talent. " -- Isaac Newton, mathematician, physicist
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PO
Pareto Optimal
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