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7 Cards in this Set
- Front
- Back
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Economy of Scope |
a proportionate saving gained by producing two or more distinct goods, when the cost of doing so is less than that of producing each separately. |
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Economic Profit |
Economic profit is the monetary costs and opportunity costs a firm pays and the revenue a firm receives. Economic profit = total revenue - (explicit costs + implicit costs). |
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Long run |
.... the conceptual time period in which there are no fixed factors of production, so that there are no constraints preventing changing the output level by changing the capital stock or by entering or leaving an industry |
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When will a firm shut down? |
if average variable cost is greater than price at each level of output |
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When will a firm increase production? |
When marginal cost is less than marginal revenue |
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When will a firm decrease production? |
When marginal cost is greater than marginal revenue |
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When will a firm keep producing? |
Whilst price is > than fixed cost and greater than variable costs, as it can service wages and bills. |
