ECN 104 Lecture Notes - Lecture 1: Petro-Canada, Sole Proprietorship, Fixed Cost
Document Summary
The firm and the business sector: different structures, firm: an organization that employs resources to produce goods and services for profit, plant: a physical establishment. Industry: a group of firs that produce the same or similar products. Horizontal combinations: firms that own plants that perform similar functions. Ex (cid:272)oke"s (cid:271)ottling plants in multiple locations. Vertical combinations: firms that own plants that perform different functions in carious stages of the production process. Ex petro canada own oil fields, refineries. Conglomerates: firms that have plants that produce products in several industries. Legal forms of business: sole proprietorship, partnership, corporation. Explicit costs: payments a firm must make. Including a normal profit the amount returned to the entrepreneur ability of the owner: economic profit = explicit cost implicit cost. Long run : a period long enough to adjust all the factors of production, firm: variable plant capacity. Industry: entry of new firms and exit of exisiting ones.
