Edexcel Economics 6. Business Behaviour

Description

Term

Price per unit (P) × output (Q)

That which a firm makes when average revenue equals average cost

The cost of producing an additional unit of output, calculated as change in total costs ÷ change in output (ΔTC ÷ ΔQ) or (total cost from producing x+1 units) - (total from selling x units)

Profit that covers the opportunity cost of being in business, being just sufficient to keep the firm in the market

Economies of scale that arise from the expansion of a firm

Internal economies of scale resulting from cheaper rates from advertising agencies, such as how a full page advert does not cost double a half page advert

The percentage of turnover in the UK in 2018 that was accounted for by large businesses (250+ employees)

Where a firm produces output at the level of highest total revenue and thus above maximum profit, marginal revenue equaling zero

That which affects a business's objectives in that if it has just been established it may seek just to break even, whereas if it is more well established it may look to achieve profit and expansion

That which firms might do so as to allow the covering of temporary losses for one product by subsidising it with profits from another, such as is done by Amazon.com

Description

Term

The cost per unit of output feasible when all factors of production are variable

The which often arises where conflicts of interest arise between stakeholders

Total variable costs (TVC) ÷ output (Q)

The four factors of production in alphabetical order

That which firms might do so as to ensure control over the supply of and price of materials

The additional revenue gained by a firm from selling an additional unit of output

The which firms might not do so as to; avoid regulatory burdens, minimise overhead costs, maintain flexibility, adaptability, and the close relationship with consumers, maintain quality control, or due to the owner's lifestyle choice

The factor of production that takes risks, organises production, and earns profit

That which often arises from increased resource costs due to competition, as well as pollution, congestion, and overuse and depreciation of infrastructure

That which price elasticity of demand is when marginal revenue is positive