ECN 104 Lecture Notes - Lecture 9: Petro-Canada, Sole Proprietorship, Fixed Cost
17 Feb 2018
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Document Summary
Firms that own plants that perform similar functions. Firms that own plants that perform different functions in the various stages of the production process. E. g. petro canada owns oil fields, refineries, and gas stations. Firms that have plants that produce products in several industries. Legal forms of businesses: sole proprietorship, partnership, corporation. Explicit costs payments a firm must make. Pool financial resources (4482$) of a large number of people. Cost of production include all costs explicit, implicit, . Economic profit = revenue (implicit cost + explicit cost) Short run : a period too short to alter the plant capacity. Fixed plant capacity but can use it more or less intensively by applying more or less variable inputs (labour, raw materials) Industry : entry of new firms and exit of existing ones. Long run : a period long enough to adjust all the factors of production. Production function : the relationship between inputs and output.
