accounting profits  total revenue minus total costs, where total costs exclude the implicit opportunity costs; this is the definition of profits usually reported by firms.
economic profits  total revenue minus total costs, where total costs include opportunity costs, whether implicit or explicit.
external diseconomies of scale  a situation in which growth in an industry causes average total cost for the individual firms to rise because of some factor external to the firm; it corresponds to an upward-sloping long-run industry supply curve.
external economies of scale  a situation in which growth in an industry causes average total cost for the individual firm to fall because of some factor external to the firm; it corresponds to a downward-sloping long-run industry supply curve.
free entry and exit  movement of firms into and out of an industry that is not blocked by regulation, other firms, or any other barriers.
industry  a group of firms producing a similar product.
long-run competitive equilibrium model  a model of firms in an industry in which free entry and exit produce an equilibrium such that price equals the minimum of average total cost.
long-run equilibrium  a situation in which entry into and exit from an industry are complete and economic profits are zero, with price equal to average total cost (ATC).
long-run industry supply curve  a curve traced out by the intersections of demand curves shifting to the right and the corresponding short-run supply curves.
normal profits  the amount of accounting profits when economic profits are equal to zero.
price-cost margin  the difference between price and marginal cost divided by the price. This index is an indicator of market power, where an index of 0 indicates no market power and a higher price-cost margin indicates greater market power.
price-maker  a firm that has the power to set its price, rather than taking the price set by the market.
Standard Industrial Classification (SIC)  a taxonomy used to label and group industries for statistical purposes; each industry is given an SIC code.