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RESERVE REQUIREMENTS: Rules by the Federal Reserve System governing the amount of bank reserves that banks must keep to back up their deposits. Legal reserve requirements came about because banks that practice fractional-reserve banking are sometimes inclined to make too many interest-paying loans and neglect to keep enough reserves on hand to pay their depositors. In principle, the Fed can alter reserve requirements to control the money supply. In practice, however, the Fed prefers to use open market operations or the discount rate.
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                           TOTAL REVENUE CURVE, PERFECT COMPETITION: A curve that graphically represents the relation between the total revenue received by a perfectly competitive firm for selling its output and the quantity of output sold. It is combined with a perfectly competitive firm's total cost curve to determine economic profit and the profit maximizing level of production. The slope of the total revenue curve is marginal revenue. Perfect competition is a market structure with a large number of small firms, each selling identical goods. Perfectly competitive firms have perfect knowledge and perfect mobility into and out of the market. These conditions mean perfectly competitive firms are price takers, they have no market control and receive the going market price for all output sold.The total revenue curve reflects the degree of market control held by a firm. For a perfectly competitive firm with no market control, the total revenue curve is a straight line. For firms with more market control, especially monopoly, the total revenue curve is "hump shaped," increasing, reaching a peak, then declining. The slope of this total revenue curve is marginal revenue. Total Revenue Curve,
Zucchini Style |  |
Total revenue is commonly represented by a total revenue curve, such as the one displayed in the exhibit to the right. This particular total revenue curve is that for zucchini sales by Phil the zucchini grower. The vertical axis measures total revenue and the horizontal axis measures the quantity of output (pounds of zucchinis). Although quantity on this particular graph stops at 10 pounds of zucchinis, the nature of perfect competition indicates it could go higher. This curve indicates that if Phil sells 1 pound of zucchinis, then he receives $4 of total revenue. Alternatively, if he sells 10 pounds, then he receives $40 of total revenue. Should he sell 100 pounds, then he would move well beyond the graph, with $400 of total revenue. The "curve" is actually a "straight line" because Phil is a price taker in the zucchini market. He receives $4 for each pound of zucchinis sold whether he sells 1 pound or 10 pounds. The constant price is what makes Phil's total revenue curve a straight line.
Recommended Citation:TOTAL REVENUE CURVE, PERFECT COMPETITION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: April 24, 2018].
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Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors seeking to buy either a birthday greeting card for your grandmother or a coffee cup commemorating yesterday. Be on the lookout for empty parking spaces that appear to be near the entrance to a store.
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The earliest known use of paper currency was about 1270 in China during the rule of Kubla Khan.
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"You have to find something that you love enough to be able to take risks, jump over the hurdles and break through the brick walls that are always going to be placed in front of you. If you don't have that kind of feeling for what it is you're doing, you'll stop at the first giant hurdle. " -- George Lucas
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CIFCI
Cost, Insurance, Freight, Commission and Interest
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