the increase in total cost that arises from an extra unit of production the quantity of output that minimizes average total cost the property whereby long run average total cost falls as the quantity of output increases (long run average costs decline as production increases) the property whereby long run average total cost rises as the quantity of output increases (long run average costs rise as production increases) the property whereby long run average total cost stays the same as the quantity of output changes (long run average costs stay the same as production increases) a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker total revenue divided by the quantity sold the change in total revenue from an additional unit sold a cost that has already been committed and cannot be recovered a firm that is the sole seller of a product without close substitutes a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms the business practice of selling the same good at different prices to different customers  

1. marginal cost

the increase in total cost that arises from an extra unit of production

2. efficient scale

the quantity of output that minimizes average total cost

3. economies of scale

the property whereby long run average total cost falls as the quantity of output increases (long run average costs decline as production increases)

4. diseconomies of scale

the property whereby long run average total cost rises as the quantity of output increases (long run average costs rise as production increases)

5. constant returns to scale

the property whereby long run average total cost stays the same as the quantity of output changes (long run average costs stay the same as production increases)

6. competitive market

a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker

7. average revenue

total revenue divided by the quantity sold

8. marginal revenue

the change in total revenue from an additional unit sold

9. sunk cost

a cost that has already been committed and cannot be recovered

10. monopoly

a firm that is the sole seller of a product without close substitutes

11. natural monopoly

a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms

12. price discrimination

the business practice of selling the same good at different prices to different customers