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UNEMPLOYMENT PROBLEMS: The unemployment or resources, especially labor, is one of the more important macroeconomic issues facing economists and government leaders. The two key problems are: personal hardships and lost production. When resources don't produce goods, their owners don't earn income. The loss of income results in less consumption and a lower living standard. If fewer resources are engaged in production, fewer goods and services are produced. A decline in the income, consumption, and production associated with unemployment triggers further declines in income, consumption, and production. Members of society who might escape the direct, immediate personal hardships of unemployment can succumb to the indirect, multiplicative problems of lost production.
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                           SUPPLY TO A FIRM: The range of quantities of a factor that a firm is able to buy at a range of factor prices. Supply to a firm is a phrase that is most relevant to the study of factor markets, especially when contrasted with supply by a firm. Supply to a firm puts the firm on the buying side of the factor market. Supply by a firm puts the firm on the selling side of the factor market. The distinction between "supply to a firm" and "supply by a firm" is most important for produced factors of production, especially the vast array of capital goods. The importance comes from the possible confusion over which side of the factor market a firm is on. This confusion results as much as anything from the notion that firms are typically on the supply-side of the product markets and the demand-side of factor markets. However, firms also appear on the supply-side of factor markets.To illustrate this notion of "supply to a firm," consider the production of Quadra 9000 computers by the innovative folks at Quadra DG Computer Works. Standard operating procedure for Quadra DG Computer Works is to produce Quadra 9000 computers according to the standard principles of production and cost (law of diminishing marginal returns, profit-maximization, etc.). It then supplies these computers to consumers, like Duncan Thurly, residing in households all over the economy, through product markets (stores, mail order, etc.). Quadra DG Computer Works does the supplying of Quadra 9000 computers and the relevant phrase is "supply by a firm." The phrase "supply by a firm" is also relevant if Quadra DG Computer Works supplies Quadra 9000 computers as capital goods rather than consumer goods. When Quadra 9000 computers are used as capital goods and they are considered a factor of production. For example, Quadra 9000 computers are an important productive factor for cellular telephone communication services offered by Digital Distance Wireless Telecommunications. The phrase "supply to a firm," however, is relevant from the other side of this computer market. From the viewpoint of Digital Distance Wireless Telecommunications, computers are being supplied TO, not FROM. They are the buyers in this factor market. This supply to a firm involves the "supply" of Quadra 9000 computers, with the "to a firm" being Digital Distance Wireless Telecommunications. The distinction between "supply to a firm" and "supply by a firm" is particularly important in terms of market control. For a perfectly competitive buyer, "supply to a firm" is a perfectly elastic, horizontal supply curve. For a monopsony, in which the buyer has complete control over the buying-side of the market, then the supply to a firm is the overall market supply which is typically a positively-sloped curve. For imperfectly competitive firms, including oligopsony and monopsonistic competition, supply to a firm is corresponding portions of the overall market supply. By way of comparison, for a perfectly competitive seller, the supply by a firm, that is the firm's supply curve, is the firm's marginal cost curve above average variable cost. For a monopoly, in which the seller has complete control over the selling-side of the market, then the supply by a firm is whatever the monopoly supplies, which may or may not follow a standard positively-sloped supply curve. For imperfectly competitive firms, including oligopoly and monopolistic competition, supply by a firm is corresponding portions of the overall market supply controlled by each firm.
Recommended Citation:SUPPLY TO A FIRM, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: February 4, 2023].
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BLACK DISMALAPOD
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Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club seeking to buy either a graduation present for your niece or nephew or a toaster oven that has convection cooking. Be on the lookout for letters from the Internal Revenue Service.
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In the Middle Ages, pepper was used for bartering, and it was often more valuable and stable in value than gold.
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"The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it." -- Michelangelo Buonarroti, Painter and Sculptor
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AOQ
Average Outgoing Quality
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