Vocab
Variable Input
What is something that can be changed in the Short Run.
Costs that can be avoided in the short run
What is fixed costs
Marginal Product
What is change in total labor divided by change in labor.
What is fixed cost
The time period which all input can be altered
What is the long run
Fixed Input
What is something that cannot be changed in the short run.
These costs are calculated by dividing the costs of the output
What is average costs
Average Product
Definition of short run
All costs are what in the long run
What is variable
Marginal Cost
What is the additional cost of producing one more unit of output.
When marginal revenue equals marginal cost, a competitive firm is
What is maximizing its product
Marginal Costs
What is change in total cost divided by change in quantity.
At least three types of production costs
Output is increasing at a faster rate than all inputs
What is Increasing returns to scale
Increasing Returns to Scale
What is output increasing at a faster rate than all inputs.
In the short run, the cost must continuously decrease as the output produced increases.
What is average fixed cost
Average Variable Cost
What is variable costs divided by quantity.
Losses are minimized by
What is shutting down temporarily
Output is increasing at a slower rate than all inputs
what is decreasing returns to scale
Diseconomies of Scale
What is long-run ATC increases as output increases.
When a firm is producing zero output, total cost equals
What is fixed cost
Average Total Cost
What is the average fixed cost divided by the average variable cost.
To be able to run in the short run, a firm must...
What is have a total revenue that covers its variable costs
Output is increasing at the same rate as inputs
What is constant returns to scale