Vocabulary
A Variable Input is
What can be changed in the short run of production
Average Variable Cost
What is the variable cost divided by the Quantity
Plant Capacity
What is a firms maximum potential level of production
When Marginal cost rises
What is diminishing returns
LRATC
What is the Long Run Average Total Cost Curve
A Fixed Input is
What cannot be changed in short run in production
Average Total Cost
What is the total cost divided by the quantity
Example of a Variable Input
What is labor, materials, ingredients
When Marginal cost decreases
What is specialization
Economies of scale
What is long run ATC decreases as output increases
Meaning of Total Production
What is the total quantity of output produced by a certain amount of inputs
Average Fixed Cost
What is the fixed cost divided by the quantity
Example of Fixed Input
What is tools, machines, factories
Total Cost
What is the sum of fixed and variable costs
DISeconomies of scale
What is long run ATC increases as output increases
A physical product
What is tangible, a human made object that's bought or invested in
Average Product
What is Total Product divided by Labor
Marginal Product represents
What is the slope of total production line
Variable Cost
What is a cost that changes with the output
Efficient Scale
What is long run ATC is constant as output increases
Diminishing Returns
What is proportionally smaller in profits or benefits in result of investment
Marginal Product
What is change in Total Product divided by change in Labor
Where Marginal Product intersects
Fixed Cost
What is a cost that must be paid even when the output is zero
minimum efficient scale
what is helping determine number of firms in a market