Econ short-run table

AP (Accounting Profit)

Revenue (Price x Quantity) - Explicit Costs

Econ Profit

Accounting profit - Implicit Costs

OR

Total Rev - Explicit Cost - Implicit Costs

Normal Profit

When Economic Profit (Total Rev - Explicit Costs - Implicit Costs) = 0

What are Explicit Costs

Land, Labor, Capital

Short-Run

Fixed plant or Capital K
Some variable inputs (i.e Labor & Natural Rsrcs)

Period where at least 1 input is fixed

Long-Run

Is variable; all inputs are variable
Variable plant sizes (sizes of an industry)
Period where firms enter & exit, allowing them to change their scale to optimize production

Marginal Product (MP)

Change in Total Prod. / Change in Labor Input

AKA Change in Tot. Prod / Change in # of Workers

Avrg Prod. (AP)

Total Prod. / Units of Labor
AKA Amount of Product / # of workers

Avrg Fixed Costs

TFC / Total Product

Avrg Variable Costs

TVC / Total Product

Avrg Tot. Costs

TC / Total Product

Marg. Costs

Change of TC / Change in Total Product

Does cost of capital change?

No, stays as the same number each time