The Costs of Production luHInSNAI Chapter 13 Copyright C 2001 by Harcourt, Inc All rights reserved. Requests for permission to make copies of any part of t work should be mailed to Permissions Department, Harcourt College Publishers 6277 Sea Harbor Drive. Orlando Florida 32887-6777
The Costs of Production Chapter 13 Copyright © 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department, Harcourt College Publishers, 6277 Sea Harbor Drive, Orlando, Florida 32887-6777
The costs of production The law of supply o Firms are willing to produce and sell a greater quantity of a good when the price of the good is high oThis results in a supply curve that slopes upward H arc Inc items and derived items copyright o 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Costs of Production The Law of Supply: uFirms are willing to produce and sell a greater quantity of a good when the price of the good is high. uThis results in a supply curve that slopes upward
The Firms Objective The economic goal of the firm is to maximize profits. H arc Inc items and derived items copyright C 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Firm’s Objective The economic goal of the firm is to maximize profits
A Firm's Total revenue and Total Cost ◆ Total revenue e The amount that the firm receives for the sale of its output ◆ Total cost o The amount that the firm pays to buy Inputs H arc Inc items and derived items copyright o 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. A Firm’s Total Revenue and Total Cost uTotal Revenue u The amount that the firm receives for the sale of its output. uTotal Cost u The amount that the firm pays to buy inputs
A Firm's Profit Profit is the firms total revenue minus its total cost Profit= Total revenue- Total cost H arc Inc items and derived items copyright C 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. A Firm’s Profit Profit is the firm’s total revenue minus its total cost. Profit = Total revenue - Total cost