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What is TP in economics?
The abbreviation for total product, which is the total quantity of output produced by a firm for a given quantity of inputs.
What happens when the cost of capital increases?
The market value of a firm's equity increases, the cost of capital decreases.
How does a firm calculate marginal cost?
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit.
What is the scale effect economics?
The scale effect indicates what happens to the demand for the firm's inputs as the firm expands production. As long as capital and labor are "normal inputs," the scale effect increases both the firm's employment and capital stock.
For the average total cost curve of a firm without economies of scale what happens to costs as output increases?
costs go down
What is TP in economics?
The abbreviation for total product, which is the total quantity of output produced by a firm for a given quantity of inputs.
What happens when the cost of capital increases?
The market value of a firm's equity increases, the cost of capital decreases.
How does firm calculate margin cost?
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit.
How does a firm calculate marginal cost?
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit.
What is the scale effect economics?
The scale effect indicates what happens to the demand for the firm's inputs as the firm expands production. As long as capital and labor are "normal inputs," the scale effect increases both the firm's employment and capital stock.
For the average total cost curve of a firm without economies of scale what happens to costs as output increases?
costs go down
For the average total cost curve of a firm without economies of scale what happens to cost as output increases?
costs go down
Will each firm in an industry always supply the same quantity at each price?
No
What does it mean if a firm has excess capacity?
a firm has excess capacity if it produces below its efficient scale, whcih is the quantity at which total cost is a minimum.
What effect does leasing have on a firm's capital structure?
Leasing is a substitute for debt financing, so leasing increases a firm's financial leverage.
What are underlying assumptions in break even point analysys?
1- quantity of units produced = quantity of unit sold , so there is no change in invetory . 2- prices will remain fixed. 3- variable cost rate will remain fixed 4- total fixed costs will remain fixed up to maximum manufacuring capacity of the firm
What happens to profits as firms leave an industry?
When a firm closes down its business, it implies less competition in the field and hence, lesser need to cut prices and stay afloat. Therefore, though a firm shuts down, the overall profitability increases. It has been said that competition is waste, monopoly is efficient.
