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Erstellt von Saravanan Sonia
vor fast 11 Jahre
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Frage | Antworten |
Profit Maximisation | process by which a firm determines the price and output level that gives the greatest profits |
Horizontal merger | when firms in the same industry at the same stage in the production process merge |
Vertical merger | when firms in the same industry at different stage in the production process merge |
Conglomerate merger | when 2 firms in different industries merge |
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the difference between the firm's total revenue received from the sale of output and its total costs paid to attract resources from their best alternative use |
Total revenue (TR) | firm's total earnings from the sales of its product for a specific period of time |
Average Revenue (AR) | revenue per unit of product sold |
Marginal Revenue (MR) | additional revenue arising from the sale of an additional unit of output |
short run | period of time over which at least 1 factor of production is fixed |
long run | period of time long enough for all factors of production to be varied |
fixed cost of production | costs that are incurred from the use of fixed factors of production |
variable cost of production | costs that are incurred from the use of factors of production that are variable |
average fixed cost (AFC) | fixed cost per unit of output |
Total Fixed Cost (TFC) | costs that do not vary with outputs |
Total Variable Cost (TVC) | costs that vary (+)ly with output |
Average Variable Cost (AVC) | variable cost per unit of output |
Total Costs of Production (TC) | sum of all costs incurred in producing any level of output (TFC & TFC) |
Average Cost of Production (AC) | total cost per unit of output |
Marginal Cost (MC) | additional cost arising from an additional output |
Law of diminishing returns | as more and more units of a variable factor (e.g: Labour) are added to an unchanged amount of fixed factor (e.g: Land), the additional output produced by the additional variable factor will eventually decrease |
Law of returns to scale | the returns from production when all the factors of production are increased or decreased simultaneously by the same proportion |
increasing returns to the scale | where a given percentage increase in inputs will lead to a larger percentage increase in outputs |
constant returns to the scale | where a given percentage increase in inputs will lead to the same percentage increase in outputs |
decreasing returns to the scale | where a given percentage increase in inputs will lead to a smaller percentage increase in outputs |
Economies of Scale (EOS) | experienced if unit cost falls as the output increases |
Internal economies of Scale | fall in unit costs of production when the firm increases output by expanding its scale of production |
external economies of scale | refers to the fall in unit costs of production experienced by the firm as a result of the industry growing from other firms in the industry expanding their scale of production |
Diseconomies of Scale (DisEOS) | experienced if the unit cost increases as the output increases |
internal diseconomies of scale | rise in unit costs of production when the firm increases output by expanding its scale of production |
external diseconomies of scale | rise in unit costs of production experienced by the firm as a result of the industry growing from other firms in the industry expanding their scale of production |
Technical Economy of Scale | reduction in unit costs when a firm expands its plant size |
Non-technical Economy of Scale | other cost savings (not related to plant size) that the firm experiences |
Implicit Cost | opportunity cost of using resources that are owned and do not involve a direct payment of money |
implicit costs | actual costs of using resources that arise when a firm makes actual cash payments for the resources purchased in the factor market |
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