Short run
The form of production cost in which some costs are variable and others are fixed.
What is the short run?
The form of production cost in which no costs are fixed. All costs are variable.
What is the long run?
The marginal cost formula.
What is MC = ΔTC / ΔQ?
The thing that provides an incentive for firms to innovate, cut costs, and generally engage in behavior that uses society’s resources efficiently.
What is profit?
The profit maximization rule.
What is MR = MC
A cost that must be paid even when a firm's output is zero; a cost that is the same at all output levels.
What is a fixed cost?
When output is increasing at a faster rate than all inputs.
What is increasing returns to scale?
The average fixed cost formula
What is AFC = FC/Q?
The names of the two types of profit.
What are economic profit and accounting profit?
The formula for marginal revenue.
What is Δ total rev / Δ quantity?
A cost that changes as output changes.
What is a variable cost?
When output is increasing at a slower rate than all inputs.
What is decreasing returns to scale?
The average variable cost formula.
What is AVC = VC/Q?
The profit after subtracting explicit costs (out of pocket expenses).
What is accounting profit?
The formula for marginal cost.
What is Δ Total cost / Δ Quantity
The sum of fixed and variable costs.
What is total cost?
When output is increasing at the same rate as all inputs.
What is constant returns to scale?
The average total cost formula.
What is ATC = TC/Q?
The profit after subtracting both explicit and implicit costs from total revenue.
What is economic profit?
A company/firm should shut down.
What is if TR < VC < TC or if MR = MC < AVC?
The additional cost of producing one more unit of output.
What is marginal cost?
Long-run ATC decreases as output increases.
What is economies of scale?
The formulas of accounting and economic profit.
What are Accounting profit = Total cost - Explicit costs
&
Economic profit = Total revenue - explicit costs & implicit costs?
3 examples of explicit costs.
What are wages, rent, and materials?
A company/firm should stay open.
What is if TR > TC or TR = TC, or MR = MC > ATC.