ECON 1000 Chapter Notes - Chapter 10-1: Canada Revenue Agency, Opportunity Cost, W. M. Keck Observatory

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ECON 1000 Full Course Notes
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Each firm is an institution that hires factors of production and organizes those factors to produce and sell goods and services. Other things are the means to that goal. A firm that does not seek to maximize profit either fails or is taken over by a firm that does seek that goal. Depreciation is the fall in the value of a firm"s capital. To calculate depreciation, accountants use revenue canada rules based on standards established by the accounting profession. Accountants measure a firm"s profit to ensure that the firm pay the correct amount of income tax and show investors how their funds are being used. Economists measure a firm"s profit to enable them to predict the firm"s decisions, and the goal of these decision is to maximize economic profit. Economic profit is equal to total revenue minus total cost, with total cost measured as the opportunity cost of production.

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