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Firms
organizations that produces goods and services
ex: Nike
Fixed Factor of Production
a factor of production that cannot be easily changed in the short run
ex: the professor in a university
Variable Factor of Production
a factor of production that can be changed in the short run
ex: different flavors in a coffee shop
Short Run
at least one fixed variable over a planning period
Long Run
planning period over which a firm consider all factors of productions as variable
Variable Costs
the costs associated with the use of variable factors of production.
ex: labor
Fixed Costs
costs associated with the use of fixed factors of production
ex: rent
Labor Intensive
a firm that requires more labor
ex: construction
