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Definition
| The amount a firm receives for the sale of its ourput. |
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Definition
The market value of the inputs a firm uses in production.
the amount a firm pays |
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Definition
| Total revenue - total cost |
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Term
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Definition
Input costs that require an outlay of money by the firm.
What the firm pays out. |
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Definition
Input costs that do not require an outlay of money by the firm.
What the firm/owner could be making if they did something else
Total cost=explicit+implicit |
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Term
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Definition
| Total revenue - (explicit + implicit) |
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Term
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Definition
| Total revenue - explicit costs |
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Term
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Definition
The replationship between the quantity of inputs used to make a good and the quantity of that good.
Relationship between # of inputs and # of outputs. |
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Definition
The increase in output that arises from an additional unit of input
Increase of output if one more input is used. |
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Term
| Diminishing Marginal Product |
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Definition
The property whereby the marginal product of an input declines as the quantity of the input increases.
As the # of outputs goes up, production funtion flattens, or stops increasing. |
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Term
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Definition
Costs that do not vary with the quantity of output produced.
The same price no matter what. |
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Definition
Costs that vary with the quantity of output produced.
Change with production. |
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Definition
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Definition
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Definition
| Variable costs / quantity |
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Term
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Definition
The quantity of output that minimizes average total cost.
AFC and AVE are balanced. |
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Term
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Definition
The property whereby long-run average total costs fall as the quantity of output increases.
ATC down as Q up. |
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Term
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Definition
The propery whereby long-run average total cost rises as the quantity of output increases.
ATC up as Q up |
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