Winter Quarter Notes

Winter Quarter Notes - Marginal cost The change in total...

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Marginal cost - The change in total cost that comes from making or producing one additional item. Long-run Average Total Cost - A business metric that represents the average cost per unit of output over the long run For instance, if a manufacturing company builds a new, larger plant for production, it is assumed that the LRATC per unit would eventually become lower than at the old plant as the company takes advantage of certain economies of scale. Economies of Scale - The increase in efficiency of production as the number of goods being produced increases. Price Maker - A monopoly or a firm within monopolistic competition that has the power to influence the price it charges as the good it produces does not have perfect substitutes. holds a large amount of power over the price it charges Increase output only as long as its marginal revenue is greater than its marginal cost, in other words, as long as it's producing a profit. Monopolistic Competition:
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Winter Quarter Notes - Marginal cost The change in total...

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