Definitions L1 Flashcards
1
Q
firm
A
an organisation that brings together factors of production in order to produce output
2
Q
normal profit
A
the return needed for a firm to stay in the market in the long run
3
Q
supernormal profit
A
profit above normal profits
4
Q
profit maximisation
A
marginal cost=marginal revenue
5
Q
sales revenue maximisation
A
marginal revenue=0
6
Q
sales volume maximisation
A
average cost=average revenue … zero
7
Q
growth maximisation
A
a firm produces at a loss in the short run (AC>AR) to maximise market share growth
