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When the quantity of the output varies from 5 shirts to 10 shirts, fixed cost would be 30 dollars. [1] In this case, the average fixed cost of producing 5 shirts would be 30 dollars divided by 5 shirts, which is 6 dollars. In other words, when 5 shirts are produced, 30 dollars of fixed cost would spread and result in 6 dollars per shirt.
Household production theory has been used to explain the rise in married female labor-force participation over the course of the 20th century, as the result of labor-saving appliances. [4] More recently with the rise of the DIY or Maker movement household production has become more sophisticated.
[1] [2] A monopoly occurs when a firm lacks any viable competition and is the sole producer of the industry's product. [1] [2] Because a monopoly faces no competition, it has absolute market power and can set a price above the firm's marginal cost. [1] [2] The monopoly ensures a monopoly price exists when it establishes the quantity of the ...
In economics, inferior goods are those goods the demand for which falls with increase in income of the consumer. So, there is an inverse relationship between income of the consumer and the demand for inferior goods. [1] There are many examples of inferior goods, including cheap cars, public transit options, payday lending, and
[6] Final goods are items that are ultimately consumed, rather than used in the production of another good. For example, a microwave oven or a bicycle that is sold to a consumer is a final good or consumer good, but the components that are sold to be used in those goods are intermediate goods.
A Robinson Crusoe economy is a simple framework used to study some fundamental issues in economics. [1] It assumes an economy with one consumer, one producer and two goods. The title "Robinson Crusoe" is a reference to the 1719 novel of the same name authored by Daniel Defo
This new anti-Engels interpretation is contrary to the traditional Marxist view, which defines a commodity as a product of labour and not as a product of exchange. On this view, the simple exchange of commodities presupposes at least that the commodities are produced for exchange. Historically, the development of simple exchange of commodities ...
Under the standard assumption of neoclassical economics that goods and services are continuously divisible, the marginal rates of substitution will be the same regardless of the direction of exchange, and will correspond to the slope of an indifference curve (more precisely, to the slope multiplied by −1) passing through the consumption bundle in question, at that point: mathematically, it ...