ECON 1 Lecture Notes - Lecture 4: Invisible Hand, The Demise, The Incentive

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What will be produced- the goods and services that can be produced at a continuing profit will be produced while those whose production generates a loss will be discontinued. Profits = (are the difference between) total revenue (tr) and total cost (tc). Consumer sovereignty is crucial in determining the types and quantities of goods produced. The consumer dollar votes registers their wants in the market. How it will be produced- it will be produced in combinations of resources and technologies to minimize the cost per unit. Least cost production means firms must employ the most economically efficient technique of production depends on. The available technology and techniques that can be used to combine economic resources to produce the desired results. Who will get the goods the consumers who have sufficient income and want to spend their money on a particular good can have it. The market system is dynamic: consumer preferences, technologies, and resource supplies all change.

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