Real Estate Taxes and Production Costs

These flashcards cover key concepts related to real estate taxes and production costs, including fixed and variable costs, economies of scale, and marginal costs.

Fixed Costs

Costs that do not change with the level of output.

Variable Costs

Costs that vary with the level of production or sales.

Property Taxes

A fixed tax based on the value of real estate property.

Insurance Premiums

Monthly payments for insurance that are considered fixed costs.

Sales Taxes

A variable cost that depends on the amount of sales made.

Average Fixed Cost

Total fixed cost divided by the quantity produced.

Average Variable Cost

Total variable cost divided by the quantity produced.

Marginal Cost

The cost of producing one additional unit of output.

Economies of Scale

Cost advantages that a business obtains due to the scale of operation.

Diseconomies of Scale

When an increase in production leads to a higher per unit cost.

Minimum Efficient Scale

The lowest point at which a firm can produce such that its long-run average costs are minimized.

Long Run Average Total Cost Curve

A curve that shows the lowest possible cost for any level of output in the long run.