Appreciation or Depreciation of a Currency
a rise or fall in the value of a currency when the currency is floating and market forces determine its value.
Short term, speculative flows of money across foreign exchanges, made in order to make profit on the difference between the buying and selling price of the currency.
The average cost of production per unit, calculated by dividing the total cost by the quantity produced.
It is equal to the average variable cost + average fixed cost.
The cost of producing an extra unit of output.
The cost of producing any given level of output.
It is equal total variable cost + total fixed cost.
Costs which do not vary as the level of production increases or decreases.
Costs which vary directly in proportion to the level of output of a firm.
Economies of Scale.
A fall in the long run average costs of production as output rises.
Diseconomies of Scale.
A rise in the long run average costs of production as output rises.
External Economies of Scale.
Falling average costs of production, shown by a downward shift in the average cost curve, which result from a growth in the size of the industry within which a firm operates.
Internal Economies of Scale.
Economies of scale which arise because of growth in the scale of production within a firm.
Minimum Efficient Scale of Procution.
The lowest level of output at which long run average cost is minimised.
The everage receipts per unit sold.
It is equal to; total revenue/quantity sold.
The addition to total revenue of an extra unit sold.
The total money recieved from the sale of any given quantity of output.
The profit over and above normal profit.
The levels of output where total revenue = total cost.
The profit that the firm could make by using its resources in their next best use. Normal profit is an economic cost.
The technique adopted by firms of fixing a price for their products by adding a fixed percentage profit margin to the long run average cost of production.
Making sufficient profit to satisfy the demands of shareholders.
Barriers to Entry.
Factors which make it difficult or impossible for firms to enter an industry and compete with exisiting producers.
The market share of the largest firms in an industry. (e.g 5 firm concentration ratio)