ECON101 Lecture Notes - Lecture 10: Canada Revenue Agency, Sunk Costs, Opportunity Cost

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: wokiakumase

Document Summary

Firm an institution that hires factors of production and organizes those factors to produce and sell goods and services. A firm"s goal is to maximize profit, any firm who does not seek this goal is eliminated or taken over by a firm that is seeking this goal etc. The firm is operated by the owner, who actively seeks this goal. Agents (managers) may have other objectives such as expanding market share, o. Non fundamental goals can include making a high-quality product, business growth, job satisfaction, etc. Depreciation is the fall in the value of a firm"s capital. Accountants use canada revenue agency rules, based on standards established by the accounting profession. Measure a firm"s profit to ensure the firm pays the correct amount of income tax and show investors how the funds are being used o. Economic profit equal to total revenue minus total cost, with total cost measured as the opportunity cost of production o o o.