Marginal Product of Labor

Marginal Product of Labor

The change in output from hiring one additional unit of labor

Increasing Marginal Returns

A level of production in which the marginal product of labor increases as the number of workers increases.

Diminishing Marginal Returns

A level of production in which the marginal product of labor decreases as the number of workers increases

Fixed Cost

A cost that does not change, no matter how much of a good is produced

Variable Cost

A cost that rises or falls depending on the quantity produced

Total Cost

Fixed Cost + Variable Cost

Marginal cost

The cost of producing one more unit of a good

Marginal Revenue

the additional income from selling one more unit of a good; sometimes equal to price