Chapter 6 Chapter Test

This is the ability of the firm to influence the price of a good or service.

• Supply chain management
• Market power
• Consumer surplus
• Price elasticity

Firms who have no market power.

• Price takers
• Oligopolists
• Monopolists
• Price makers

It is the price that yields the highest profit - the price at which the marginal revenue equals the marginal cost.

• Optimal Price

• Maximum Price

• Discount Price

• Retail Price

Change in price leads to change in quantity produced and sold. As a result, the total revenue and total cost of a firm change. Changes in total revenue and total cost lead to change in

It is a measure of the responsiveness of quantity demanded of a good to changes in price of that good.

• Price elasticity of demand
• Consumer surplus
• Demand curve slope
• Market equilibrium

PED > 1 (or |PED| > 1). A relatively large change in quantity demanded for a small change in price. 

PED = 1 (or |PED| = 1). The percentage change in quantity demanded is equal to the percentage change in price. 

PED < 1 (or |PED| < 1). A relatively small change in quantity demanded for a large change in price. 

Total Revenue = Price x

It is the change in total revenue that results from selling one additional unit of output.

• Marginal Revenue
• Total Revenue
• Average Revenue
• Fixed Revenue