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Microecomics chapter 4
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Terms in this set (20)
Explicit cost
Any cost tgat the owner of a business must pay a non owner of firm or business
Implicit cost
The same thing as opportunity costs the owner of the business could have earned making a different choice
Fixed costs
Any cost that stays constants even if the firm shuts down you have to still pay
Variable cost
Any cost that changes with how much quantity you make
Total cost formula
Fixed cost+ variable cost
Variable cost formula
Total cost-fixed cost
Fixed cost formula
Total cost-variable costs
Marginal cost formuala
Change in total cost divided by the change in quantity
Average fixed cost formuala
Fixed cost divided by the quantity
Average variable cost formula
Variable cost divided by the quantity
Average total cost formula
Total cost divided by the quantity
Formula for the per unit profit or loss
Price- average total cost
Total profit or loss formula
Average profit x the quantity of your profit maximing
Accounting profit formula
Total revenue- explicit costs
Economic profit formula
Total revenue- explicit costs= accounting profits- implicit costs
Marginal revenue formula
Change in total revenue divided by change in quantity
Marginal revenue=marginal cost
The profit maximizing point is the quantity of products that equals
What is price
The amount of money received for selling one unit of the good
What is profit
The difference between the revenue collected from selling the product and cost to make a profit
Total revenue
The total amount of money received from selling all units of the good
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