Obstacle to a firm entering an industry. Legal barriers, Marketing barriers, limit pricing, large economies of scale, high capital costs, natural barriers.
1 of 6
Barriers to exit
Obstacles to a firm leaving an industry. Sunk costs, money spent on advertising, specialist equipment, consultancy fees, contractual penalties.
2 of 6
Conduct/Behaviour
Objective of the firm, profit max, sales rev max, sales output max, profit satisfying. Determines price, quantity, quality, effiiency.
3 of 6
Economies of scale
A reduction in long run average costs resulting from an increase in the scale of production. Technical economies of scale(better use of machinery), purchasing economies of scale, selling economies of scale, managerial economies of scale,
4 of 6
Economies of scale
Financial economies of scale, risk bearing economies of scale. A firm that is too large experiences diseconmies of scale. Managers losing control of the firm due to size.
5 of 6
Accounting profits
This is economic profit - the profit made in the next best alternative.
6 of 6
Other cards in this set
Card 2
Front
Obstacles to a firm leaving an industry. Sunk costs, money spent on advertising, specialist equipment, consultancy fees, contractual penalties.
Back
Barriers to exit
Card 3
Front
Objective of the firm, profit max, sales rev max, sales output max, profit satisfying. Determines price, quantity, quality, effiiency.
Back
Card 4
Front
A reduction in long run average costs resulting from an increase in the scale of production. Technical economies of scale(better use of machinery), purchasing economies of scale, selling economies of scale, managerial economies of scale,
Back
Card 5
Front
Financial economies of scale, risk bearing economies of scale. A firm that is too large experiences diseconmies of scale. Managers losing control of the firm due to size.
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