Vocab
What is shortrun?
Variable inputs can be altered, and some inputs are fixed
What is the formula for average fixed cost?
Fixed Cost/Quantity
LRATC makes a U Shape True or False?
True
With Economies of Scale:Long-Run ATC decreases as output increases True or False?
True
MP Represents the slope of...
TP
What is Long Run?
Most of the time fixed inputs
Accounting Profit Formula is...
Accounting Profit = Total Revenue - Explicit Costs
In a marginal product and total product graph, when MP is is positive but decreasing, what is happening to the TP?
Increasing at a decreasing rate
What is plant capacity?
Number of units in volume made of a period of time
When MP rises it is know as...
Specialization
What is decreasing returns to scale?
Output is incrreasing at slower rate
What is the formula for Average Fixed Cost
Fixed Cost/quantity
In a marginal product and total product graph, when MP is zero, what is TP?
TP is at a maximum.
What is the definition of Fixed Inputs?
Inputs that cannot be changed in the short run to change production.
When MP increases TP...
Increases at increasing rate
what is Increasing returns to scale
Output is increasing at a faster rate then all inputs
What is the formula for Total Revenue?
Price X Quantity
When MC rises it is known as...
Diminishing Returns
What is Profit?
The money earned from the company owner
When MP is positive and decreasing...
TP is increasing at a decreasing rate
what is Constant Returns to scale?
Output increasing at the exact same rates as all the inputs
What is Average Variable Cost
Variable Cost/ Quantity
When MP is negative TP is...
Decreasing
What is Long Run?
for a firm to change all of its inputs; the period of time long enough for a firm to alter it's plant capacity.
When MP is above AP...
AP Rises