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| With groups: Economics Instructors, ECO 211 001 (2009SP) | |
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| Term | Definition |
|---|---|
| Profit Maximization | Primary goal of any firm - to earn the most profit possible from the sale of its goods or services. |
| Profit | Income earned by firms. (Profit = TR - TC) |
| π (Pi sign) | π is used to symbolize profit. (π = TR - TC) |
| Average Revenue | Revenue per unit produced. (AR = TR/Q) NOTE: AR always equals Price. |
| Marginal Revenue | The extra revenue earned from producing an extra unit of a good. The change in total revenue divided by the change in quantity. (MR = change TR/change Q) |
| AR | Average Revenue |
| MR | Marginal Revenue |
| MR = MC Rule | The guide by which firms maximize profit (or minimize loss.) |
| Loss Minimization | When a firm faces the certainty of incurring losses, its goal is to incur the lowest loss possible with the production of its goods and services. |
| Shutdown | Ceasing operations - the firm's loss minimization occurs at zero output. |
| Terms | 10 |
| Creator | lsturgis |
| Created | December 2, 2008 |
| Groups | Economics Instructors, ECO 211 001 (2009SP) |
| Subject | microeconomics |
| Access | Anyone |
| Edit | Creator Only |
Chapter 9