ECON 208 Chapter Notes - Chapter 7: Variable Cost, Production Function, Marginal Cost

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: Alex Hale

Document Summary

Econ 208 chapter 7 producers in the short run. Alex hale firms as agents of production: organizing and financing of firms. What"s to come the goal of these firms is to maximize profits: (cid:1843)=(cid:1858)(cid:4666)(cid:1837),(cid:1838)(cid:4667, (cid:1842)(cid:1870)(cid:1867)(cid:1858)(cid:1872)(cid:1871)=(cid:1867)(cid:1872)(cid:1864) (cid:1844)(cid:1857)(cid:1874)(cid:1857)(cid:1866)(cid:1873)(cid:1857) (cid:1867)(cid:1872)(cid:1864) (cid:1867)(cid:1871)(cid:1872)(cid:1871) fixed and variable factors: (cid:1843)=(cid:1858)(cid:4666)(cid:1837) ,(cid:1838)(cid:4667, variable factors: (cid:1843)=(cid:1858)(cid:4666)(cid:1837),(cid:1838)(cid:4667) Production and costs in the short run. Production and costs in the long run. Organization of firms there are 6 basic types of firms: limited partnerships: single proprietorships, ordinary partnerships, corporations, state-o(cid:449)(cid:374)ed (cid:894)(cid:862)c(cid:396)o(cid:449)(cid:374)(cid:863)(cid:895) (cid:272)o(cid:396)po(cid:396)atio(cid:374)s, non-profit organization some firms are transnational corporations (tncs) / multinational enterprises (mnes) Financing of firms firms use financial capital to get started and operate: equity and debt. We make two key assumptions about firms: firms are profit-maximizers, each firm is a single, consistent, decision-making unit. Production is a flow: a number of units per a period of time. Positive economic capital: firms will move to this industry. Negative economic capital: firms will leave this industry.