Types of Inputs
Inputs that can be changed in the Short run to change production
What is Variable Inputs?
The total quantity of output produced by a certain amount of Inputs
What is Total Product?
When Marginal Product is above Average Product
What is Average Product is rising?
The sum of Fixed and Variable costs
What is Total Cost?
Output is Increasing at a faster rate than all Inputs
What is Increasing Returns to Scale?
Inputs that cannot be changed in the Short run to change production
What is Fixed Inputs?
The additional output produced by one more unit of a variable input, often Labor
What is Marginal Product?
When Marginal Product is below Average Product
What is Average Product is falling?
Formula for Marginal Cost
What is the change in Total Cost divided by the change in Quantity?
Output is Increasing at a slower rate than all Inputs
What is Decreasing Returns to Scale?
A firm's maximum potential level of Production
What is Plant Capacity?
The average quantity of output produced by one unit of a variable input, often Labor
What is Average Product?
When Marginal Product is Increasing
What is Total Product is Increasing at an increasing rate?
Fixed Costs divided by the Quantity
What is the formula for Average Fixed Cost?
Output is Increasing at the same time as all Inputs
What is Constant Returns to Scale?
The period of time long enough for a firm to change all of its Inputs; the period of time long enough for a firm to alter its plant capacity
What is the Long Run?
Formula for Average Product
What is Total Product divided by Labor?
When Marginal Product is positive but Decreasing
What is Total Product is Increasing at a decreasing rate?
Variable Costs divided by the Quantity
What is the formula for Average Variable Cost?
Long- Run ATC decreases as output increases
What is Economics of Scale?
The period of time during which there are fixed Inputs; the period of time too short for a firm to alter its plant capacity
What is the Short Run?
Formula for Marginal Product
What is the Change in Total Product divided by the Change in Labor?
When Marginal Product is zero
What is Total Product is at a Maximum?
Total Cost divided by the Quantity or (AFC+AVC)
What is the formula for Average Total Cost?
Long- Run ATC increases as output increases
What is Diseconomies of Scale?