Definitions Flashcards
(12 cards)
Define internal economies of scale
A fall in average cost due to growth of the firm
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Define specialisation
Different firms/regions/countries concentrating on the production of different goods and/or services
Define public goods
A product that is non excludable and non rival
Define fixed costs
Costs of production which do not change with output
Define profit
Total revenue minus total cost
Define price elasticity of demand
The responsiveness of quantity demanded to a change in price of that good or service
Define external costs
the cost on third parties of an economic activity
Define minimum price
A price bellow which it is illegal to trade
Define factors of production
resources used to produce goods and/or services
Define social cost
The harmful effects borne on the parties involved in the activity and third parties
Define income
A flow of money in exchange for factor services
Define competitive market
A market where no single buyer or seller can influence the market price or output
