Summary - Summary: Chapter 7 1. Firms purchase inputs to...

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Summary: Chapter 7 1. Firms purchase inputs to produce and sell outputs that range from computers to string quartet performances. In other words, they demand factors of production in input markets and supply goods and services in output markets. 2. All firms, whether competitive or not, demand inputs, engage in production, and produce outputs. All firms have an incentive to maximize profits and thus to minimize costs. 3. Central to our analysis is production, the process by which inputs are combined, transformed, and turned into outputs. Firms vary in size and internal organization, but they all take inputs and transform them into goods and services for which there is some demand. 4. If we want to understand a firm's costs, we first need to understand how it efficiently combines inputs to produce goods and services. 5. Production and productive activity are not confined to private business firms. Households also engage in transforming factors of production (labor, capital, energy, natural resources, and so on) into useful things.
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6. A firm exists when a person or a group of people decides to produce a good or service to
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Summary - Summary: Chapter 7 1. Firms purchase inputs to...

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