economics: section 7.2
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13 Terms
total cost
the sum of all of the factors of production used in making a good
average cost
the cost of all factors of production used in producing one unit of a good
reducing costs
the lower a total average cost, the more profit a producer will have
fixed cost
expense that does not change even if the business is not producing anything
variable cost
expense that changes as the operation of the business is carried out
total cost
sum of fixed and variable costs
marginal cost
cost to produce one more unit of a good
marginal product of labor
how much additional output a company can produce by adding one more worker
profit
total revenue from sales minus total cost of producing products
marginal revenue
total revenue divided by production output
total revenue
marginal revenue x output per day
profit per day
total revenue minus total cost
marginal profit
change in profit per day divided by change in production output per day