ECON 1050 Study Guide - Final Guide: Monopoly Profit, Average Variable Cost, Marginal Revenue
Document Summary
Firm: is an institution that hires factors of production and organizes those factors to produce and sell goods and services. The fundamental goal of a firm: they are means to that goal and to maximize profit. Depreciation: is the fall in the value of the firm"s capital. To calculate depreciation: accountants use canada revenue agency rules which are based on standards established by the accounting profession. Accountants measure a firms profit to ensure that the firm pays the correct amount of income tax and to show its investors how their funds are being used. It is the value of real alternatives forgone. This is expressed in money units so we can compare and add up the value of the alternatives forgone. A firm"s opportunity cost of production is the sum of the cost of using resources: resources bought in the market.