Chapter 5 Flashcards
(12 cards)
Price Elasticity of Supply
Responsiveness of Supply to a change in Price
Factors of Production
Land, Labour, Capital and Enterprise
Fixed Factors
One that cannot be varied in the short run
Variable Factor
one that can be varied in the short run
Average Cost
Total Cost Divided by output
Marginal Cost
The cost of producing one extra unit of output
Vertical integration
Merger at different stage within same industry
Horizontal Integration
Merger at some stage in same industry
Conglomerate Merger
Merger into different industry
Private Costs
Costs which a firm has to pay
Social Costs
Costs which result from output but which accrue to society
economies of scale
“cost advantages reaped by companies when production becomes efficient”
arise from increases in the size of an organization.
total costs fall as output rises
