ECON

is total revenue minus total cost
– Total cost includes explicit and implicit costs

• profit

• revenue

• assets

Most goods and services are sold

• profit maximizing firms

• standardized products

converts inputs into outputs

• production

• variable factor

is an input used in the
production of a good or a service

• factor of production

• short run

• long run

is the period of time when at least
one of the firm's factors of production is fixed

• short run

• long run

is the period of time in which all
inputs are variable

• short run

• long run

they can be
changed in the short run

• variable factors

• fixed factor

it cannot be
changed in the short run

• fixed factory

• variable factor

is the sum of all payments for
fixed inputs

• fixed cost

• variable cost

• marginal cost

• total cost

is the sum of all payments for
variable inputs

• variable cost

• fixed cost

• total cost

• marginal cost