EC120 Lecture Notes - Lecture 13: Marginal Product
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EC120 Full Course Notes
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Industrial organization: study of how firms" decisions regarding prices/quantities depend on the market conditions they face. Fixed costs (fc): costs that do not vary with quantity of output. Variable costs (vc): costs that do vary with quantity of output produced produced. Total cost (tc): tc = fc + vc. Explicit costs: input costs that require an outlay of money by the firm. Implicit costs: input costs that do not require an outlay of money by the firm (ex. time) Total revenue (tr): amount a firm receives for the sale of its output. Total costs (tc): market value of inputs a firm uses in production (tc. Economists measure firm"s economic profit as firm"s total revenue minus all opportunity costs of producing goods and services sold. Accountant measures firm"s accounting profit as total revenue minus only the firm"s explicit costs. Relationship between quantity of inputs used to make a good and quantity of output of that good.
