ECON 1010H Chapter Notes - Chapter 10: Economic Efficiency, Opportunity Cost, Market Price
11 Nov 2016
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The firm and its economic problem factors to produce and sell goods and services: bought in the market, owned by the firm. Accountants use accounting profit to ensure that firm pays correct amount of income tax and to show its investors how their funds are being used that a firm uses in production. ^ it is the sum of the cost of using resources: Firm institution that hires factors of productions and organizes those: economic profit total revenue minus total cost, total cost is measured as opportunity cost of production. A firm"s goal is to maximize profit. Economists measure firm"s profit to enable them to predict firm"s decisions. Opportunity cost of production value of best alternative use of resources: supplied by the firm"s owner. Implicit rental rate firm"s opportunity cost of using the capital it owns. Economic depreciation fall in the market value of a firm"s capital over a.
