Month: January 2022

This is the level of output at which total profit is at maximum. It is the best or the most efficient size of a firm when the long run average cost of a firm is at minimum. At this point Read More …

It helps in understanding the concept of cost. The following are necessary: Opportunity Cost Assuming full resources allocation and employment in production of good and services increasing the production of any one product involves the sacrifice of an alternation product. Read More …

In the long run all factors of production can be varied and thus the firm will chose the input combination which optimize output and at the same time minimize their cost. This is illustrated by the use isoquant and isocost. Read More …

This is a technical relationship between the output of good and the input required to make these goods. The function may take the form of an equation, a table or a graph. The relationship between an input and output is Read More …

This refers to the concentration of activity in those lines of production where the individual, firm or country has natural or acquired an advantage. Adam Smith drew attention to the importance of division of labour in his book, the wealth Read More …

This refers to the inputs or resources from the society that are used in the process of production .They include land, labour, capital and entrepreneurship Land It refers to all natural recourses over which people have power of disposal and Read More …