0
Wages A+
What else can I help you with?
Which term refers to the cost a firm incurs for labor?
Wages A+
The cost of a firm that vary with the level of production are called?
variable cost
Which cost amounts can be found in a firm's accounting records?
sunk cost
Is it true that Retained earnings have no cost to the firm?
Yes
How do you calculate the profit maximizing quantity of labor?
To calculate the profit-maximizing quantity of labor, a firm should equate the marginal cost of labor (the wage rate) to the marginal revenue product of labor (MRP), which is the additional revenue generated by hiring one more unit of labor. The formula is: MRP = ΔTR/ΔL, where ΔTR is the change in total revenue from an additional unit of labor and ΔL is the change in the quantity of labor. The optimal labor quantity is reached when the wage rate equals the MRP. If the wage is below the MRP, hiring more labor increases profit, while if the wage exceeds the MRP, reducing labor will enhance profitability.
Which term refers to the cost a firm incurs for labor?
Wages A+
What term refers to the cost a firm incurs for capital goods?
Interest
Which term refers to the cost a firm incurs for capital goods?
interest
Which term refers to the cost of a firm incurs for capital goods?
Interest
What happens if a company over invests in net working capital?
If a firm over invest in net working capital, it incurs cost in the form of opportunity cost.
What demand curve indicates the firm incurs a loss?
It's when the MR is not equal to MC. The firm in this case is unable to produce output the equals marginal revenue to marginal cost.
When the firm attains minimum average variable cost how many units of labor is it using?
When a firm attains minimum average variable cost, the number of units of labor it is using depends on the average product.
What is Efficient scale?
Scale efficiency is the potential productivity gain from achieving optimal size of a firm
What is the relationship between a firm's total revenue profit and total cost?
A firm's total revenue is the total income generated from selling goods or services, while total cost represents the expenses incurred in the production process. Profit is calculated as the difference between total revenue and total cost. Therefore, if total revenue exceeds total cost, the firm earns a profit; if total cost exceeds total revenue, the firm incurs a loss. This relationship highlights the importance of managing costs and maximizing revenue to achieve profitability.
What is labour intensity?
Labor intensive refers to the combinations of factor inputs for a firm. If a firm produces a good that is labor intensive it means that the number of units of labor is high relative to the number units of capital (or whatever other factor of production there is). For example, education and teaching is very labor intensive, as the teaching field needs a lot of people to educate and handle the administration of education. It is also not likely that the teaching sector will not shift to ever be capital intensive. Any firm that produces a good that is intensive in any factor is vulnerable to shocks or changes in the cost of that factor. If the price of labor increases it will greatly hinder the ability the firm's ability to produce that good.
What is firm equilibrium?
Firm equilibrium refers to a situation where a firm achieves a balance between its costs and revenues, maximizing profits. This is attained when the firm produces the level of output where marginal cost equals marginal revenue. It represents the point of optimization for the firm.
What is true about how a firm in a competitive market decides what level of output to produce in order to maxmize its profit?
In a competitive market, a firm maximizes its profit by producing the level of output where marginal cost (MC) equals marginal revenue (MR). At this point, the additional revenue generated from selling one more unit is exactly equal to the additional cost incurred in producing that unit. If the price is greater than the average total cost (ATC) at this output level, the firm earns a profit; if it's less, the firm incurs a loss. Therefore, the firm will adjust its output to reach this equilibrium where MC = MR.
