14.1 Economic Cost and Profit
MyEconLab Concept Video
A Walmart store is much larger than a 7-Eleven and clearly costs more to operate. But which store has the lower cost per customer served? Now the answer is not so obvious. You’ll find the answer at the end of this chapter.
Like a Walmart store and a 7-Eleven, the 20 million firms in the United States differ in size. They also differ in what they produce. But all firms perform the same basic economic function: They hire factors of production and organize them to produce and sell goods and services. To understand the behavior of a firm, we need to know its goals.
The Firm’s Goal
If you asked a group of entrepreneurs what they are trying to achieve, you would get many different answers. Some ...
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