Theme 3: Revenues Costs Profits

Question 1

Diminishing returns

Answer 1

The decrease marginal output of a production process as the amount of a single factor of production is incremetly increased

Question 2

Economies of scale

Answer 2

-technical economies of scale
-purchasing economies of scale
-manegeriak economies of scale
-financial economies of scale
-risk bearing economies of scale
-marketing economics of scale

Question 3

Shutdown points

Answer 3

Shutdown point is at the lowest point on the AC curve
Firms shut down short run in the long run they leave the market