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PLANNING HORIZON: Another term for the long-run average cost curve. The long-run average cost curve is termed the planning horizon because it provides information a firm can use to plan factory construction and expansion in the long run.
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Lesson 10: Utility and Demand | Unit 2: A Simple Choice
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Page: 5 of 21
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- The question of the day is: How much, if any, time should I spend at the beach?
- No Constraints
- If the price of beach frolicking is zero or if have nothing better to do with my time and more than enough income to buy all of the beach frolicking that I want, the choice is relatively simple.
- I achieve utility maximization by spending the number of hours at the beach that generates the highest level of utility. That number is 6 or 7 hours and the total utility generated is 42 utils.
- Spending any more or less time generates less total utility.
- Even though I can afford to spend all day at the beach (8 hours), I won't. The total utility of 8 hours is less than that for 6 or 7 hours.
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TOTAL REVENUE CURVE, PERFECT COMPETITION A curve that graphically represents the relation between the total revenue received by a perfectly competitive firm for selling its output and the quantity of output sold. It is combined with a perfectly competitive firm's total cost curve to determine economic profit and the profit maximizing level of production. The slope of the total revenue curve is marginal revenue.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store looking to buy either a brown leather attache case or car battery jumper cables. Be on the lookout for pencil sharpeners with an attitude.
Your Complete Scope
This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"Cherish your visions and your dreams as they are the children of your soul; the blue prints of your ultimate achievements." -- Napoleon Hill, Author
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ATM
Automated Teller Machine
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