ECO 202 Youtube: Long-run production

What is a firm?

a firm is a business such as a corporation(company) that produce or sell goods and provide services with the aim of generating revenue and profit

What is economy of scale

economy of scale is as a business total production or output increases increases their average cost will fall or decrease.

What is the difference between revenue and profit

Revenue is the total amount producer recieved after selling a good.

profit is the total amount producer earn after manimizing production cost.

for example if i sell my car for 7000 dollar the revenue i recieve was 7000 dollar but the profit i earn is 2000 dollar becuase i spent 5000 dollar buying the car in the first place.

What is diseconomy of scale

As a business output or product increases their long-run average cost increases.

What is average cost?

Average cost also know as average total cost or unit cost.

It measures how much a business has to spend on each unit or product of output produced.