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The Theory of the Firm - Mind Map

Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.

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The Theory of the Firm

1. Costs
   • Total Cost (FC + VC)
   • Variable (direct) Costs
   • Fixed (indirect or overhead) Costs
   • Average Costs (TC/Q)
   • Marginal Costs (TCn - TCn-1)
   • Opportunity Cost
   • Short run
   • Long Run
2. Production Function
   • Output (Q)
   • Inputs
     • Capital (K)
     • Land (L)
     • Labour (La)
   • Q = f(K, L, La)
   • Law of Diminishing Marginal Returns
   • Total Product
   • Average Product (TP/Q)
   • Marginal Product
   • Productivity
3. Profit
   • Normal Profit
   • Abnormal or Supernormal Profit
   • Sub-normal Profit
   • Short Run
     • At least one factor fixed
   • Long Run
     • All factors variable
4. Revenue
   • Total Revenue (P x Q)
   • Average Revenue (TR/Q)
   • Marginal Revenue (TRn - TRn-1)