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June 22, 2024 

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SALES MAXIMIZATION: The notion that business firms (especially those operating in the real world) are primarily motivated by the desire to achieve the greatest possible level of sales, rather than profit maximization. On a day-to-day basis, most real world firms probably do try to maximize sales rather than profit. For firms operating in relatively competitive markets, facing relative fixed prices, and relatively constant average cost, then increasing sales is bound to increase profits, too. Moreover, according to the notion of natural selection, even firms that seek to maximize sales, those that also maximize profit will remain in business.

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QUASI-RENT: The payment that is received by a resource of production activity over the opportunity cost in the short run. The notion of quasi-rent is similar to economic rent, or economic profit, which is payment or revenue received over opportunity cost. The key difference is that quasi-rent is a short-run phenomenon. While quasi-rent is "extra" payment received in the short run, such payment might be essential to keep the resource or production activity in the long run. An example is the quasi-rent received due to the patent on a technological innovation. In the short run, the revenue received can be considered as profit in excess of the opportunity cost of production. However, in the long run this extra revenue motivates innovators to develop new technology. Without quasi-rent the innovations would not occur.

     See also | rent | profit | opportunity cost | short run | economic profit | economic rent | technology | patent |


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CLASSICAL ECONOMICS

A theory of economics, especially directed toward macroeconomics, based on the unrestricted workings of markets and the pursuit of individual self interests. Classical economics relies on three key assumptions--flexible prices, Say's law, and saving-investment equality--in the analysis of macroeconomics. The primary implications of this theory are that markets automatically achieve equilibrium and in so doing maintain full employment of resources without the need for government intervention. Classical economics emerged from the foundations laid by Adam Smith in his book An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776. Although it fell out of favor in the 1930s, many classical principles remain important to modern macroeconomic theories, especially aggregate market (AS-AD) analysis, rational expectations theory, and supply-side economics.

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Today, you are likely to spend a great deal of time at a going out of business sale wanting to buy either a set of luggage with wheels or a birthday gift for your aunt. Be on the lookout for telephone calls from former employers.
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On a typical day, the United States Mint produces over $1 million worth of dimes.
"The majority of men meet with failure because of their lack of persistence in creating new plans to take the place of those that fail. "

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