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LONG-RUN MARGINAL COST: The change in the long-run total cost of producing a good or service resulting from a change in the quantity of output produced. Like all marginals, long-run marginal cost is the increment in the corresponding total. What's most notable about long-run marginal cost, however, is that we are operating in the long run. Unlike the short run, in which at least one input is fixed, there are no fixed inputs in the long run. As such, there is only variable cost. This means that long-run marginal cost is the result of changes in the cost of all inputs.
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Lesson 13: The Firm | Unit 4: U.S. Firms
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Page: 19 of 24
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- Let's see what these numbers can tell us about firms in the economy.
- The most striking bit of information is that the overwhelming majority of firms in the economy are proprietorships.
- These proprietorships, however, tend to be small operations. Proprietorships account for only 5% of the total sales.
- While corporations constitute only 20% of the firms in the economy, they account for a whopping 89% of total sales.
- When you encounter a firm, the odds are it's a proprietorship.
- Nothing particular remarkable can be noted about partnerships.
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SIMPLE EXPENDITURES MULTIPLIER A measure of the change in aggregate production caused by changes in an autonomous expenditure that shocks the macroeconomy, when consumption is the ONLY induced expenditure. The simple expenditures multiplier is the inverse of one minus the marginal propensity to consume, or more simply the inverse of the marginal propensity to save. A related multiplier is the simple tax multiplier, which measures the change in aggregate production caused by changes in taxes.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store hoping to buy either decorative celebrity figurines or a flower arrangement with anything but tulips for your grandfather. Be on the lookout for infected paper cuts.
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This isn't me! What am I?
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"Plans are only good intentions unless they immediately degenerate into hard work." -- Peter Drucker, management consultant
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SPO
Strongly Pareto Optimal
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