The objectives of firms Flashcards
Profits
when total income or revenue for a firm is greater than total costs.
Total revenue
what the firm receives for the sale of its product=price*no. sold
Average revenue
total revenue/no. sold
Marginal revenue
the addition to total revenue from the production of one extra unit.
total profit
total revenue minus total costs.
Normal profit
the amount required to keep a factor employed in its present activity in the long run.
Profit maximisation
where a firm chooses a level of output where marginal revenue equals marginal costs.
Supernormal profit
a return above normal profit-a surplus payment
Sub-normal profit
profit below normal which should lead to the firms leaving the industry.
Entrepreneur
individuals who organises the factors of production in order to make a profit
Public Limited Company
a firm owned y a group o shareholders whose shares can be traded on the LONDON STOCK EXCHANGE.
Corporation
a private enterprise firm incorporated with The Registrar of Companies.
Director
an individual elected by a company’s shareholders to set corporate policies.
Perks
non-monetary benefits like an expensive car provided by the firm.
Dividends
financial return from the ownership of shares (equities) in a firm.
