Chapter 3 Microeconomics Definitions Turbo Quiz

A payment over and above normal profit. I.e. Profit earned where average revenue exceeds average cost

• Abnormal profit

• Supernormal profit

• Economic profit

• All answers

Total cost divided by ??? (also known as cost per unit)

Total fixed cost divided by output

Output per factor (usually labour) over a period of time

Revenue divided by output (revenue per unit)

Total variable cost divided by output (variable cost by unit)

Barriers to entry: ??? that prevent new competitors from easily entering an industry or area of business

Barriers to exit: ??? in the path of a firm which wants to leave a given market or industrial sector

??? ???: The percentage of industry market share which is accounted for by the largest firms

Constant returns to scale: ??? increases by an equal proportion to the increase in ??? during the production process

• Output; fixed costs

• Output; inputs

• Revenue; LRAC

• Revenue; AFC