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Total revenue when output is changed.
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Marginal revenue is the change in
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Covers all its costs, including a provision for normal profit.
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A firm that makes zero economic profits
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Covers the full opportunity cost of the resources used by the firm.
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Normal profit
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$925
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Assume an apple farmer incurs the following costs and revenues
Fertilizer $200
Seeds $75
Water $250
Wages $750
Property taxes $600
Interest payments on borrowed funds $1,200
Sales of apples $4,000
The accounting profit is equal to
Fertilizer $200
Seeds $75
Water $250
Wages $750
Property taxes $600
Interest payments on borrowed funds $1,200
Sales of apples $4,000
The accounting profit is equal to
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-$75
answer
Assume an apple farmer incurs the following costs and revenues
Fertilizer $200
Seeds $75
Water $250
Wages $750
Property taxes $600
Interest payments on borrowed funds $1,200
Sales of apples $4,000
Suppose the entrepreneur could earn $1,000 as an employee elsewhere. This means the economic profit is
Fertilizer $200
Seeds $75
Water $250
Wages $750
Property taxes $600
Interest payments on borrowed funds $1,200
Sales of apples $4,000
Suppose the entrepreneur could earn $1,000 as an employee elsewhere. This means the economic profit is
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Number and relative size of the firms in an industry.
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Market structure is determined by the
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Monopoly.
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In which of the following types of markets does a single firm have the most market power?
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Their individual production is insignificant relative to the production of the industry.
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Competitive firms cannot individually affect market price because
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The price of the product is determined by many buyers and sellers.
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A perfectly competitive firm is a price taker because
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Horizontal
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The demand curve for each perfectly competitive firm is
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Equals the marginal revenue curve.
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The demand curve confronting a competitive firm
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Total revenue exceeds total cost by the greatest amount.
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A firm maximizes profit when
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Constant
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For the perfectly competitive firm, the marginal revenue is always
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Marginal revenue is equal to marginal cost.
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Short-run profits are maximized at the rate of output where
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P > MC
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A perfectly competitive firm should expand output when
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