are201fall09lab3key - 6 Costs which don’t vary with...

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ARE 201 Lab 3 Fall 2009 Complete each sentence. 1. The objective of a firm in a market economy is to maximize _ profits ___________. 2. Profits = _ Revenues _____________________ minus costs. 3. Profit-seeking firms usually can offer products at lower prices than nonprofit firms because profit-seeking firms use resources more _ efficiently _____________________. 4. A person contemplating starting a business is best to develop a business _ plan _______ before committing to the project. 5. A major part of the document in question #4 is simply specifying _ who _________ will purchase the product or service and why.
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Unformatted text preview: 6. Costs which don’t vary with sales (output) of a firm are _ fixed ____________ costs. 7. Costs which do vary with sales (output) of a firm are _ variable ______________ costs. 8. Rent of space and equipment is an example of _ fixed _______________ costs. 9. Material supplies (inputs) to the making of a product or service are examples of __ variable _____________ costs. 10. Another way of looking at fixed costs is that they are costs which _ must _____________ be paid, regardless of how much revenue the firm earns....
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