Eco 6351 Economics for Managers Chapter 5. Supply Decisions. Prof. Vera Adamchik. The basic activity of a firm is to use inputs , such as workers, machines, and natural resources to produce outputs of goods and services.
Prof. Vera Adamchik
Two types of constraints limit the profit a firm can make. They are:
Labor Total Product
(workers per day) (sweaters per day)
TC = TFC + TVC
TR – Total accounting cost
TR – Opportunity cost