Flashcards
Definitions I need to know
Flashcards do conjunto (34)
- 1Profit Maximisationprocess by which a firm determines the price and output level that gives the greatest profits
- 2Horizontal mergerwhen firms in the same industry at the same stage in the production process merge
- 3Vertical mergerwhen firms in the same industry at different stage in the production process merge
- 4Conglomerate mergerwhen 2 firms in different industries merge
- 5—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
- 6Total revenue (TR)firm's total earnings from the sales of its product for a specific period of time
- 7Average Revenue (AR)revenue per unit of product sold
- 8Marginal Revenue (MR)additional revenue arising from the sale of an additional unit of output
- 9short runperiod of time over which at least 1 factor of production is fixed
- 10long runperiod of time long enough for all factors of production to be varied
- 11fixed cost of productioncosts that are incurred from the use of fixed factors of production
- 12variable cost of productioncosts that are incurred from the use of factors of production that are variable
- 13average fixed cost (AFC)fixed cost per unit of output
- 14Total Fixed Cost (TFC)costs that do not vary with outputs
- 15Total Variable Cost (TVC)costs that vary (+)ly with output
- 16Average Variable Cost (AVC)variable cost per unit of output
- 17Total Costs of Production (TC)sum of all costs incurred in producing any level of output
(TFC & TFC) - 18Average Cost of Production (AC)total cost per unit of output
- 19Marginal Cost (MC)additional cost arising from an additional output
- 20Law of diminishing returnsas 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
- 21Law of returns to scalethe returns from production when all the factors of production are increased or decreased simultaneously by the same proportion
- 22increasing returns to the scalewhere a given percentage increase in inputs will lead to a larger percentage increase in outputs
- 23constant returns to the scalewhere a given percentage increase in inputs will lead to the same percentage increase in outputs
- 24decreasing returns to the scalewhere a given percentage increase in inputs will lead to a smaller percentage increase in outputs
- 25Economies of Scale (EOS)experienced if unit cost falls as the output increases
- 26Internal economies of Scalefall in unit costs of production when the firm increases output by expanding its scale of production
- 27external economies of scalerefers 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
- 28Diseconomies of Scale (DisEOS)experienced if the unit cost increases as the output increases
- 29internal diseconomies of scalerise in unit costs of production when the firm increases output by expanding its scale of production
- 30external diseconomies of scalerise 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
- 31Technical Economy of Scalereduction in unit costs when a firm expands its plant size
- 32Non-technical Economy of Scaleother cost savings (not related to plant size) that the firm experiences
- 33Implicit Costopportunity cost of using resources that are owned and do not involve a direct payment of money
- 34implicit costsactual 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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- Secondary 3 Economics FlashCards sobre Definitions I need to know, criado por Saravanan Sonia em 17-11-2013.
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- Saravanan Sonia
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