Micro

1. dcsvgeerhnIt is the annual flow of net income generated by an investment referent as a percentage of the total investment 2. A second-rate rate of return is the rate of return on corking that is just sufficient to keep owners satisfied. 3. Marginal ware versus ordinary product Marginal product is the additional assent that canful be produced by hiring one more whole of a item arousal, holding all other input quantities constant 4. Short pro big is the period where the solid is operating under a obstinate racing shell (fixed factors) of issue; and, new trustworthys can neither take part nor passing an industry.mm Long course is the period for which there be no fixed factors of production. Hence firms increase or cliff the eggshell of their operations. New firms can enter and existing firms can last the industry The difference between the short run and considerable run is the difference between day-to-day operations and abundant term strategic planning. 5. Increasing returns to scale means that a given percentage increased in the production of undertakeup requires a smaller percentage increase in the input. Hence, as output rises, average greet of production falls. This is what is called economies of scale: a reduction in cost per unit of output that follows from a larger scale of production.

* The sources of economies of scale are mostly technological. However, to the highest degree result from sheer size (buying in volume for abase prices) Constant returns to scales means that the quantitative relationship between input an d output stays constant Decreasing return! s to scale is when average cost increases with scale of production. Its most often cited cause is bureaucratic inefficiency. 6. Long- run adjustments and mechanism. a. Long run adjustments to short run break: in a long run equilibrium, each firm ordain choose the scale of plant that produce its goods at stripped long run average cost (optimal scale of plant). This is because ambition drives firms to adopt not just the most...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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