ECON 1000 Lecture Notes - Lecture 10: W. M. Keck Observatory, Opportunity Cost

• School: York University
• Department: Economics
• Course: ECON 1000
• Professor: Andrea Podhorsky

Document Summary

A firm is an institute that hires factor of production and organizes them to produce and sell goods. Maximize the profit, and if they don"t, they will be eliminated or taken by another firm that seeks to maximize profit. They measure a firm"s profit and make sure that they paying the right amount of tax and show investors that how their funds are being used. Economist measure a firm"s profit to enable them to predict the firm"s decisions to maximize economic profit. A firm"s opportunity cost of production is the sum of the cost of using resources. The amount spent by a firm on resources bought is an opportunity cost of production because the firm could have bought different resources to produce some other good or service. If the firm owns capital and uses it to produce its output, then the firm have an opportunity cost.