econ vocab for 5-3
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Created by:
MeganBurge on October 6, 2010
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9 terms
Terms | Definitions |
|---|---|
 fixed cost | the cost that a business incurs evenif the plant is idle and output is zero |
| overhead | total fixed cost |
| variable cost | a cost that changes when the business rate of operation or output changes |
| total cost | the sum of the fixed and variable costs |
| marginal cost | the extra cost incurred when a business produces one additional unit of a product |
| total revenue | the number of units sold multiplied by the average price per unit |
| marginal revenue | the extra revenue associated with the production and sale of one additional unit of output |
| breakeven point | the total output or total product the business needs to sell in order to cover its total costs |
| profit-maximizing quantity of output | when marginal cost and marginal revenue are equal |
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