'Pooling' of Funds Is Required Because of the Size-Mismatch in the Amount

question 45

True/False

'Pooling' of funds is required because of the size-mismatch in the amount of funds supplied by surplus units and that demanded by deficit units.

Discern the role and calculation of normal rate of return in firm economics.

Distinguish between operating profit and economic profit.

Understand the entry and exit of firms in the short run and long run.

Grasp the concept of a firm’s revenue, total economic costs, and factors affecting them.

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Definitions:

Marginal Cost

The additional cost incurred to produce one more unit of a good or service, critical for decisions on production levels.

Marginal Revenue

The additional income that is generated by selling one more unit of a good or service.

Marginal Revenue

Marginal Revenue refers to the extra revenue that is earned by selling an additional unit of a product or service.

Marginal Cost

The hike in total expenditure linked to the production of one additional good or service unit.