Term
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Definition
| A period of time during which some of the firm's cost commitments will not have ended. |
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Term
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Definition
| A period of time long enough for all of the firm's current commitments to come to an end. |
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Term
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Definition
| The cost of an input whose quantity does not rise when output goes up, one that the firm requires to produce any output at all. |
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Term
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Definition
| A cost whose total amount changes whent he quantity of output of the supplier changes. |
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Term
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Definition
| Savings that are obtained through increases in quantities produced. Scale economies occur when an X percent increase in input use raises output by more than X percent, so that the more the firm produces, the lower it's per unit cost becomes. |
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Term
| Marginal Revenue Product (MRP) |
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Definition
| The MRP of an input is the money value of the additional sales that a firm obtains by selling the marginal physical product of that input. |
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Term
| Marginal Physical Product (MPP) |
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Definition
| The MPP of an input is the increase in total output that results from a one-unit increase in the input quantity, holding the amounts of all other inputs combined. |
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Term
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Definition
| The sum of fixed costs, variable costs, and semi-variable costs. |
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Term
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Definition
| The marginal cost of an additional unit of output is the cost of the additional inputs needed to produce that output. For example, suppose it costs $1000 to produce 100 units and $1020 to produce 101 units. The average cost per unit is $10, but the marginal cost of the 101st unit is $20 |
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Term
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Definition
| A process that companies undergo to determine the best output and price levels in order to maximize its return. |
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Term
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Definition
| The total amount of money it recieves from the purchasers of its products, without any deduction of costs. |
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Term
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Definition
| A company's total earnings, calculated according to Generally Accepted Accounting Principles (GAAP), and includes the explicit costs of doing business, such as depreciation, interest and taxes. |
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Term
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Definition
| Equals net earnings minus the opportunity costs of captial and of any other inputs supplied by the firm's owner. |
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Term
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Definition
| A firm that has the legal status of a fictional individual. Owned by stockholders and is run by a set of elected officers and a board of directors, whose chairperson is often also in a powerful position. |
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Term
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Definition
| an IOU sold by a corporation that promises to pay the holder of the bond a fixed sum of money at the specified maturity date and some other fixed amount of money every year until maturity. |
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Term
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Definition
| A piece of paper that gives the holder of the stock a share of the ownership in the company. |
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