EC120 Chapter Notes - Chapter 13: Marginal Cost, Fixed Cost, Marginal Product
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EC120 Full Course Notes
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Industrial organization the study of how firms" decisions regarding prices and quantities depend on the market conditions they face. Total revenue-> the amount that the firm receives for the sale of its output. Total cost the amount that the firm pays to buy input. Firm"s cost of product include all the opportunity cost. Explicit cost input costs that require an outlay of money by the firm. (wages. ) Implicit cost input costs that do not require an outlay of money by the firm. ( time) accounting profit ignore this cost. Economic profits count both explicit cost and implicit cost. Profit a firm"s total revenue minus its total cost. The production function the relationship between the quantity of inputs (workers) and quantity of output (cookies). The marginal product the increase in the quantity of output obtained from one additional unit of that input.