⭐️ PRODUCTION & COSTS

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7 Terms

1
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What is economic profit?

Total revenue minus total cost (including implicit costs).

2
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What is marginal cost?

The change in total cost from producing one additional unit.

3
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What is ATC?

ATC = AFC + AVC.

4
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How are MC and ATC related?

MC intersects ATC and AVC at their minimum points.

5
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What is efficient scale?

Output where ATC is minimized.

6
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What is the short run?

A period where at least one input is fixed.

7
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What is the long run?

A period where all inputs are variable.