KEY TERMS

ACCOUNTING COST is the recorded cost of an activity and in the ledgers of a business , so the cost
appears in entity's financial statements.
AVERAGE FIXED COST (AFC) is the fixed costs of production (FC) divided by the quantity (Q) of
output produced. Fixed costs are those costs that must be incurred in fixed quantity regardless of the level
of output.
AVERAGE VARIABLE COST it represents the total variable cost per unit, including materials and labor,
in short term production calculated by dividing total variables
BUSINESS PROFIT describes the financial benefit realized when revenue generated from a business
activity exceeds the expenses,costs, and takes involved in sustaining the activity in question.
ECONOMIC COST is the combination losses of any goods that have a value attached to them by any one
individual. The factors to be taken into consideration are money,time and other resources.
ECONOMIC PROFIT is the difference between the revenue received from the sale of an output and the
costs of all inputs used and any opportunity costs.
EXPLICIT COST is a direct payment made to others in the course of running a business ,such as wage,
rent and materials, as opposed to implicit costs where no actual payment is made.
FIXED COST is a business costs, such as rent, that are constant whatever the quantity of goods or services
produced.
IMPLICIT COST is any cost that has already occurred but not necessarily shown or reported as a separate
expense.
MARGINAL COST is the cost added by producing one additional unit of a product or service.
OPPORTUNITY COST is the loss of potential gain from other alternatives when one alternative is
chosen.
REVENUE is the income,especially when of a company or organization and of a substantial nature.
VARIABLE COST is a corporate expense that changes in proportion to production output.

CARTEL is an association of manufacturers or suppliers with the purpose of maintaining prices at a high
level and restricting competition.
COLLUSION is secret or illegal cooperation or conspiracy, especially in order to cheat or deceive others.
DUOPOLY is a situation in which two suppliers dominate the market for a commodity or service.
IMPERFECT MARKET is one in which individual buyers and sellers can influence prices and
productiob,where there is no full disclosure of information about products and prices ,and where there are
high barriers to entry or exit in the market.
MARKET is a regular gathering of people for the purchase and sale of provisions ,livestock,and other
commodities.
MONOPOLISTIC COMPETITION is a type of imperfect competition such that many producers sell
products that are differentiated from one another and hence are not perfect substitutes.
MONOPOLY is the exclusive procession or control of the supply of or trade in a commodity or service.
MONOPSONY is a market situation in which there is only one buyer.
OLIGOPOLY is a state of limited competition , in which a market is shared by a small number of
producers or sellers.
PERFECT COMETITION is the situation prevailing in a market in which buyers and sellers are so
numerous and well informed that all elements of Monopoly are absent and the market price of a commodity
is beyond the control of individual buyers and sellers.
PERFECT MARKET is a theoretical market in which buyers and sellers are so numerous and well
informed that Monopoly is absent and market prices cannot be manipulated.