Key Concepts (Grade 12 NSC Matric Economics): Flashcards
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Economic profit
Economic profit
Earnings above normal; avg revenue > avg cost
Normal profit
Normal profit
Min. to keep owner in industry; avg revenue = avg cost
Economic loss
Economic loss
Total costs exceed revenue; avg revenue < avg cost
Explicit costs
Explicit costs
Direct, out-of-pocket expenses (wages, rent, interest)
Implicit costs
Implicit costs
Value of owner's own resources (forgone rental, salary)
Short run production
Short run production
At least one factor fixed; only variable factors change
Long run production
Long run production
Complete flexibility; all factors of production adjustable
Perfect competition
Perfect competition
Many producers & buyers; no single participant influences price
Monopoly
Monopoly
Exclusive control over a commodity/service in a market
Price taker
Price taker
Business that must accept market-determined prices