growth of firms unit Flashcards
how can surplus be eliminated in min price
government purchases the surplus
consumption of what produced positive externalities
merit goods
what are production external costs
external costs arising from the production of a good or service
what are consumption external costs
external costs arising from the consumption of a good or service
what do negative externalities imply
overallocation
what do positive externalities imply
underallocation of resources
average revenue product of labour
total revenue per period/no. of employees
what are fixed costs
costs which dont vary with output
what are variable costs
costs which vary directly with output
total vc formula
vc per unit x no. of units
whats total cost formula
total fc + total vc
average cost per unit formula
total cost/total output
what is total revenue
total qty sold multiplied by price per unit sold
TR = P*Q
what is average revenue
revenue per unit sold
AR = TR/Q
what is breakeven level of output
that level at output which if sold will generate a tr equal to tc, at this level of output, a firm makes neither profit nor lorr. TR = TC, TR-TC = 0
