Micro-economics Flashcards
1
Q
Short run average cost curves will increase as output increases due to
A
Diminishing marginal returns
2
Q
Where is the minimum efficient scale
A
Where the long run marginal cost curve cuts through the long run total cost curve
3
Q
Supernormal profits
A
Profits in excess of both measured costs and those associated with opportunity costs
4
Q
What should firms only be concerned with in the short run?
A
In the short run firms will only be concerned with covering its variable costs - it should ignore sunk or fixed costs
5
Q
Price discrimination
A
When a firm can charge a different price to different customers
6
Q
5 stages of a products life cycle
A
- Introduction
- Growth
- Maturity
- Decline
- Obsolescence
