ECON 1000 Chapter Notes - Chapter 10: Product Differentiation, Monopolistic Competition, Economic Efficiency

• School: York University
• Department: Economics
• Course: ECON 1000
• Professor: Ardeshir Noordeh

Document Summary

: institution that hires factors of production and organizes them to produce and sell goods and services: firm"s goal is to maximize profit. If it fails, it"s either eliminated or taken over by another firm seeking to maximize profit: accounting profit = total revenue total cost, economic profit. = total revenue total cost (measured as the opportunity cost of production: firm"s opportunity cost of production is the sum of the cost of using resources. Bought in the market (could have bought different resources) Owned by the firm (could have sold capital and rented capital from another firm) : firm"s opportunity cost of using the capital it owns: made up of: Interest foregone: return on funds used to acquire the capital. What to produce and in what quantities: 2. How to organize and compensate its managers and workers. How to market and price its products: 5.