Microeconomics
About this set
Created by:
untouchable3676 on June 14, 2012
Subjects:
Description:
Production/Cost/Short-Run/Long-Run
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25 terms
Terms | Definitions |
|---|---|
 Total Revenue | money received from sale of outputs |
| Total Cost | money to purchase all inputs |
| Profit | TR-TC |
| Explicit Costs | input costs required by firm, cash |
| Implicit Costs | input costs not required by firm |
| Economic Profit | (TR-TC) includes explicit and implicit costs |
| Accounting Profit | (TR-explicit costs) |
| Production Function | relationship between quantity of inputs used and quantity of output |
| Marginal Product | increase in output from additional unit of input |
| Diminishing Marginal Product | marginal product of input decreases, as quantity of input increases |
| Fixed Costs | costs that don't vary with the output produced |
| Variable Costs | costs that vary with the output produced |
| Average Total Cost | TC/quantity of output |
| Average Fixed Cost | Fixed Cost/quantity of output |
| Average Variable Cost | Variable Cost/quantity of output |
| Marginal Cost | in increase in TC with an extra unit of production = change in TC/change in quantity |
| Efficient Scale | quantity of output that minimizes ATC |
| Economies of Scale | long run ATC decreases as quantity of output increases |
| Diseconomies of Scale | long run ATC increases as the quantity of output increases |
| Constant Returns to Scale | long run ATC = same as quantity of output changed |
| Competitive Market | many buyers and many sellers with identical products |
| Average Revenue | TR/quantity sold |
| Marginal Revenue | change in TR from an additional unit sold |
| Monopoly | Firm that is the sole seller of a product without any substitutes |
| Natural Monopoly | monopoly that arises because a single firm can supply a good or service to a market at a smaller cost than could 2 or more firms |
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