[ECON 3200] - Final Exam Guide - Comprehensive Notes for the exam (60 pages long!)

• School: York University
• Department: Schulich School of Business
• Course: ECON 3200
• Professor: Sergey Krylov

Document Summary

I a (cid:133)rm is an organization that transforms inputs into output and earns the di erence between revenue and costs of manufacturing. I firms exist to make pro(cid:133)t and their objective is to generate as much pro(cid:133)t to their owners as possible. I all decision that (cid:133)rms make are based on pro(cid:133)t-maximization principle. I for example, when deciding on the quantity of the good to be produced, the (cid:133)rm(cid:146)s management will choose the level of output that generates the largest stream of pro(cid:133)ts. I similarly, the optimal price is the one that maximizes pro(cid:133)ts. I all other decisions are made according to the same criteria. I therefore, in this class we would always assume that (cid:133)rms make all strategic decisions in order to maximize pro(cid:133)ts. I to answer these questions we need to know the forms of (cid:133)rms(cid:146) ownership. I unlimited liability (cid:133)rms (cid:150) sole proprietorships and partnerships.