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LOSS MINIMIZATION RULE: A rule stating that firm minimizes economic loss by producing output in the short run that equates marginal revenue and marginal cost if price is less than average total cost but greater than average variable cost. In the short run, a firm incurs total fixed cost whether or not it produces any output. As such, if the market price is falls below average total cost, it must decide if the economic loss from producing the quantity of output that equates marginal revenue and marginal cost is more or less than the economic loss incurred with shutting down production in the short run (which is equal to total fixed cost).
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SUBSTITUTE-IN-PRODUCTION One of two (or more) goods that use the same resource for production in an exclusionary manner. A substitute-in-production is one of two alternatives falling within the other prices determinant of supply. The other is a complement-in-production. An increase in the price of one substitute good causes a decrease in supply for the other.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time at a flea market wanting to buy either a wall poster commemorating Thor Heyerdahl's Pacific crossing aboard the Kon-Tiki or decorative garden figurines. Be on the lookout for the happiest person in the room.
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This isn't me! What am I?
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A half gallon milk jug holds about $50 in pennies.
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"Believe and act as if it were impossible to fail." -- Charles F. Kettering
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IJIO
International Journal of Industrial Organization
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