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Related Flashcards
Related Topics
Cards In This Set
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Total Fixed cost
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Sum of all costsFixed cost + Varible cost
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Varible cost
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Are the cost of production that vary directly with output
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Average Cost
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Total Cost / Output
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PLC
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Public Limited Company - issues shares that the public can buy on the stock exchange
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LTC
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Private Limited Company issues with shares are not for sale on a market
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The law diminishing marginal returns
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Short run - the eventual decline in output each extra worker adds to the total output when the opportunity to specialise is used up
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Fixed costs
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Are the costs of employing the fixed factors of production in the short run
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Return to scale
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Describes how output changes when the scale of all the factor of production change in the long run
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Sunk Cost
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A cost that is useless trying to include this when deciding what the price is. example; euro star
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Profit Satisficing
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Keeping shareholders happy :D
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Technical EOS
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When a business invests in new technology and is able to increase production. Therefore the production cost per unit will fail
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Marketing EOS
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A large firm can spread its advertising and marketing budget over a large output. Purchase its impacts in bulk at discounts
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Economies of scope
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Producing a number of different products
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External EOS
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Is outside the control of the firm but within the industry
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Financial EOS
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Is where a big business is percieved as reliable with a high credit rating and therefore banks are more likely lend money. low interest rates
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