Principles of Microeconomics / Unit 6 MIC 0501 short lesson, about 20 seconds
The Firm and Its Decisions
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The idea
A firm combines labor, capital, land and materials into an output worth more than the inputs. It decides what to produce, how, how much, at what price, and how many workers to hire.
In practice
A bakery, a trucking company and a law office are all firms.
Where people slip
The answers depend on costs and on the market's structure, which the next video lays out.
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