Chapter22

Chapter22 - 9/11/2007 ECONOMICS 101 CHAPTER 22 I ) Modern...

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9/11/2007 E CONOMICS 101 C HAPTER 22 I) Modern Business Firms - specialized organizations that buy resources from households and other firms to produce goods or services for sale to customers - more than 80% of U.S. employment flows through private firms Production - transforms inputs into outputs (goods or services) that are more valuable in form, place, possession, or time Short Run - a period during which the amount of at least one resource is fixed and firms can neither enter nor exit a market Long Run - a period of sufficient duration for all feasible resource adjustments to any e vent to be completed, including entry into and exit from the market Plants, Firms, and Industries - plants (i) production facilities ranging in size from the case a tattoo artist uses to a million acres of ranch land - multiplant firms (i) firms that operate more than one plant - diversified firms (i) firms that produce more than one good - conglomerates (i) giant, multiproduct firms that operate plants in several industries
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9/11/2007 - industry (i) all firms competing in the same market - horizontally integrated firms (i) firms that operate at a number of sites using similar methods to produce the same good and service (ii) ex: Toyota produces the same cars in Japan and the U.S. - vertically integrated firms (i) firms that operate at different production levels within an industry (ii) ex: most steel producers (operating mines, smelting plants, rolled steel mills, fabrication plants) I I) Why Do Firms Exist? Reducing Transaction Costs
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Chapter22 - 9/11/2007 ECONOMICS 101 CHAPTER 22 I ) Modern...

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