The firm should do nothing.
The firm should hire less labour.
The firm should increase price.
The firm should increase output.
The change in price divided by the change in output.
The change in quantity divided by the change in price.
The change in P x Q due to a one unit change in output.
Price, but only if the firm is a price searcher.
The firm is incurring an economic loss.
Implicit costs are Rs. 25,000.
The total economic costs are Rs.1,00,000.
The individual is earning an economic profit of Rs.25,000.
Large number of buyers and sellers
Freedom of entry
Absence of transport cost
AC = MR
MC = MR
MR = AR
AC = AR
TR = P x Q
AR = Price
Negatively - sloped demand curve
Marginal Revenue = Price
Economic costs include the opportunity costs of the resources owned by the firm.
Accounting costs include only explicit costs.
Economic profit will always be less than accounting profit if resources owned and used by the firm have any opportunity costs.
Accounting profit is equal to total revenue less implicit costs.
An overall decrease in price but an increase in equilibrium quantity.
An overall increase in price but a decrease in equilibrium quantity.
An overall decrease in price and a decrease in equilibrium quantity.
No change in overall price but a reduction in equilibrium quantity.
Decision making within the firm is usually undertaken by managers, but never by the owners.
The ultimate goal of the firm is to maximise profits, regardless of firm size or type of business organisation.
As the firm's size increases, so do its goals.
The basic decision making unit of any firm is its owners.
Price will increase.
Price will decrease.
Quantity will increase.
Quantity will decrease.
The equilibrium price of cameras will increase.
The equilibrium quantity of cameras exchanged will decrease.
The equilibrium price of camera film will decrease.
The equilibrium quantity of camera film exchanged will increase.
An increase in equilibrium price and quantity.
A decrease in equilibrium price and quantity.
An increase in equilibrium quantity and uncertain effect on equilibrium price.
A decrease in equilibrium price and increase in equilibrium quantity.
Price will increase; quantity cannot be determined.
Price will decrease; quantity cannot be determined.
Quantity will increase; price cannot be determined.
Quantity will decrease; price cannot be determined.
A large number of firms.
Perfect mobility of factors.
Informative advertising to ensure that consumers have good information.
Freedom of entry and exit into and out of the market.
Large number of firms in the industry.
Outputs of the firms are perfect substitutes for one another.
Firms face downward-sloping demand curves.
Resources are very mobile.
Ease of entry into the industry.
A relatively large number of sellers.
A homogenous product.