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Study with Quizlet and memorize flashcards containing terms like What are relative prices?, Nominal Income - Definition, Real Income - Definition and more.
the ability of a company to control prices and total market output. monopolistic competition. a market structure in which many companies sell products that are similar but not identical. This is the vocab for chapter 7. Learn with flashcards, games, and more — for free.
cost to a firm of utilizing economic resources in production (considers all costs relevant to production: capital, labour, raw materials, resources, opportunity costs + sunk costs).
8 wrz 2024 · Real costs refer to the total cost of producing a good or service, considering both direct and indirect expenses. This concept encompasses all resources expended in the production process, such as labor, materials, and overheads, as well as opportunity costs.
Explicit costs are out-of-pocket costs, that is, actual payments. Wages that a firm pays its employees or rent that a firm pays for its office are explicit costs. Implicit costs are more subtle, but just as important. They represent the opportunity cost of using resources that the firm already owns.
We can distinguish between two types of cost: explicit and implicit. Explicit costs are out-of-pocket costs, that is, actual payments. Wages that a firm pays its employees or rent that a firm pays for its office are explicit costs. Implicit costs are more subtle, but just as important.
What price should the firm charge for its products? How much labor should the firm employ? The answers to these questions depend on the production and cost conditions facing each firm.
