ECON 1000 Chapter Notes - Chapter 10.1-11: Oligopoly, Average Variable Cost, Average Cost
10
ECON 1000 Full Course Notes
Verified Note
10 documents
Document Summary
Institution that hires factors of production and organizes those factors to produce/sell goods. Fall in the value of the firm"s capital. Economic profit = total revenue - total cost. Total cost is measured as the opportunity cost of production. Is the value of the of the best alternative use of the resources that a firm uses in production. Firm"s opportunity cost of using the capital it owns. 2 components: economic depreciation: fall in market value of firm"s capital over time, forgone interest: money they used to buy capital could have been invested. Profit that an entrepreneur makes on average. Fixed factor is usually capital (the plant used to produce), land and entrepreneurship. When at least one factor of production is fixed, rest are variable. How to increase output in the short run increase the amount of variable factor (usually labour) When all factors of production can be varied, can change the fixed factors.
