Some Basic Economic Concepts in Business

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Already discussed factors of production, rental cost of capital

Opportunity Cost
--operating a business out of your home
--doing the work yourself vs. hiring someone
--financing out of saving vs. borrowing

Fixed Cost vs. Variable Cost: costs of setting up a business vs. cost of producing more goods and services

Economies of Scale

Unit Labor Cost--wages per hour divided by output per hour

Competition--the force that provides checks and balances

Comparative Advantage




Conclusion: good new recipes hard to find, but they are the source of growth