| − | On the CLEP exam that a few of you might take for college credit, 10–15% of the questions are devoted to the "Firm". That term refers to the seller, which is alternatively describes as a "company", a "producer", a "manufacturer", a "store", or, mostly simply, the "firm". The Firm makes decisions about how much to produce and how to try to earn a profit, such that revenue is in excess of costs. | + | On the CLEP exam that some of you will take to earn college credit, 10–15% of the questions are devoted to decisions by a "Firm". That term refers to the seller, which is alternatively describes as a "supplier", a "company", a "producer", a "manufacturer", a "store", or, mostly simply, a "firm". A Firm makes decisions about how much to produce and how to try to earn a profit, such that revenue is in excess of costs. |
| | We are on the "supply side" when we discuss companies or firms. It is on this side (rather than the demand or consumer side) where we have to decide how much you would produce if you were the President of a company. Recall that microeconomics is about supply and demand. When we are on the demand side, then we are discussing what you would buy as a consumer, and how much you would pay. When we are on the supply side, we are considering what you would produce in managing a company. Keep these concepts separate in your mind. | | We are on the "supply side" when we discuss companies or firms. It is on this side (rather than the demand or consumer side) where we have to decide how much you would produce if you were the President of a company. Recall that microeconomics is about supply and demand. When we are on the demand side, then we are discussing what you would buy as a consumer, and how much you would pay. When we are on the supply side, we are considering what you would produce in managing a company. Keep these concepts separate in your mind. |