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PERFECT COMPETITION, TOTAL ANALYSIS: A perfectly competitive firm produces the profit-maximizing quantity of output that generates the greatest difference between total revenue and total cost. This total approach is one of three methods that used to determine the profit-maximizing quantity of output. The other two methods involve the direct analysis of economic profit or a comparison of marginal revenue and marginal cost.
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AVERAGE FIXED COST Total fixed cost per unit of output, found by dividing total fixed cost by the quantity of output. When compared with price (per unit revenue), average fixed cost (AFC) indicates whether or not a profit-maximizing firm should shutdown production in the short run. Average fixed cost is one of three average cost concepts important to short-run production analysis. The other two are average total cost and average variable cost. A related concept is marginal cost.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time at a going out of business sale wanting to buy either a genuine down-filled comforter or a 200-foot blue garden hose. Be on the lookout for telephone calls from former employers.
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Ragnar Frisch and Jan Tinbergen were the 1st Nobel Prize winners in Economics in 1969.
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"I don't know the key to success, but the key to failure is trying to please everybody. " -- Bill Cosby
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BIS
Bank for International Settlements
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