A group of firms in the same industry that agree to restrict output in order to raise prices is known as a cartel , and such behavior is known as collusion. The former are known as fixed costs or equivalently as overhead costs, and the latter are known as variable costs . A firm's total cost is the sum of its fixed cost plus its total variable cost. The short run supply curve is the industry supply curve obtained when fixed costs can not be changed, and the number of firms in the industry is held constant. Short run equilibrium for an industry occurs at the price and quantity at which the short-run supply curve meets the demand curve.
Capital goods are durable assets that firms use in production like buildings.
Raw materials are materials used up in production. The marginal product of labor is the extra output that a firm gets for adding an extra worker. You have learned about some effects of trade like that there are no gains to trade between people with identical tastes and technologies trade between individuals with different technologies benefits both traders. The production possibility frontier is the set of combinations of goods that an individual or group can produce without wasting any output. A person's productivity in producing a good is the number of units of that good that he can produce per unit of time.