Create an account
the foregone income that the owner could have made by spending time working on another job
ex of a short run decision
automobile manufacturing company is trying to decide whether or not to expand its existing workforce
rachel left her business where she earned 42000 to create a new one, her total costs of new business are
both the expenses incurred for office space, equipment, and supplies and her foregone salary of $42,000 per
if marginal revenue of the last widget a firm produces is $50 and its marginal cost is $35 a firm should..
existence of economic losses induces firms to
exit an industry, which shifts the market supply curve to the left and increases market price
if demand shifts right and price/marginal revenue is above the marginal cost than
the firm is earning positive economic profit in the short run
five assumptions of the perfectly competitive market
easy exit/entry into the market
equal access to resources
firms want to produce at the max output level where marginal revenue equals marginal cost
all firms have identical products, are perfect constitutes of each other and have perfectly elastic demand
can accounting profit be positive while economic profits are negative
yes if total revenue covers expenditures, but not opportunity costs
a firm produces 30k vases w/ a cost of 180k, while producing 40k costs 200k, this could explain the theory of
economies of scale
ex of diseconomies of scale
the xyz co. increased production capacity by 25 percent and experienced a 30 percent increase in its total cost
the upward sloping portion of the short run total average cost curve is caused by
the presence of fixed inputs
long run average cost at any output level
always be less than or equal to short run average total costs
long run competitive equilibrium in an industry implies that no firm
has an incentive to enter or exit the market
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