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LRTC: The abbreviation for long-run total cost, which is the opportunity cost incurred by all of the factors of production used in the long run (when all inputs are variable) by a firm to produce of a good or service, including wages paid to labor, rent paid for the land, interest paid to capital owners, and a normal profit paid to entrepreneurs. Unlike short-run total cost, long-run total cost can not be separated into fixed cost and variable cost. In the long run, all inputs are variable, so all cost is variable.
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Lesson 18: Monopoly | Unit 4: Evaluation
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Page: 23 of 30
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Topic:
Loss Minimization
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- A monopoly faces the same three production alternatives as any firm operating in any market structure.
- P > ATC: Total revenue exceeds total cost and the firm receives a positive economic profit.
- ATC < P > AVC: Total revenue falls short of total cost, meaning the firm incurs an economic loss (or negative economic profit).
- P < AVC: Total revenue also falls short of total cost, and the firm incurs an economic loss (or negative economic profit).
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EXPORTS LINE A graphical depiction of the relation between exports sold to the foreign sector and the economy's aggregate level of income or production. This relation is most important for deriving the net exports line, which plays a minor, but growing role in the study of Keynesian economics. An exports line is horizontal which indicates that exports are totally autonomous, with no induced component. The aggregate expenditures line used in Keynesian economics is derived by adding or stacking the net exports line, derived as the difference between the exports line and imports line, onto the consumption line, after adding investment expenditures and government purchases.
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Cyrus McCormick not only invented the reaper for harvesting grain, he also invented the installment payment for selling his reaper.
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"The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires." -- William Ward ‚ Texas Wesleyan University Administrator
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JFE Journal of Financial Economics
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