Theme 3: Business behaviour and the labour market - Edexcel A-Level Economics A quiz

Backward vertical integration

Forward vertical integration

Conglomerate integration

Horizontal integration

Owners and managers may have different objectives

Firms always seek to maximise their total profits in every case

Consumers in the market are assumed to have perfect information

All markets in the economy are assumed to be perfectly competitive

Marginal revenue is exactly equal to zero

Marginal cost equals marginal revenue

Average cost is exactly equal to average revenue

Total revenue has reached its highest possible point

Marginal cost equals marginal revenue

Average cost is at a minimum

Marginal revenue equals zero

Price equals marginal cost

Long run, when every single factor of production is variable

Only in the very long run, once all technology has changed

Only in the financial market for company shares

Short run, when at least one factor is fixed

The minimum return needed to keep a firm in the industry, covering opportunity cost

Any extra profit that is earned above the minimum needed to stay in the industry over time

Zero earnings for the firm and its owners across the whole period

Profit that can only ever be earned by a pure monopoly firm

Supernormal profit

Only normal profit

A guaranteed loss

Revenue-maximising output

Output is at the lowest average cost

The firm innovates over time

Price equals marginal cost

Costs are kept to a minimum

A single dominant seller of a good in the product market

An organised trade union representing workers

A labour market that contains many competing employers

A single (or dominant) buyer of labour

Force prices to rise more slowly than inflation, passing efficiency gains to consumers

Set a binding minimum price floor that the regulated firm must always charge its customers

Guarantee the regulated firm a fixed and protected level of annual profit

Ban the natural monopoly firm from operating in the market at all