Costs (short & long run) Flashcards
(5 cards)
1
Q
What cost curve is normal profit built into.
A
AVC-average cost curve.
2
Q
What are total costs?
A
TC=VC+FC
VC-costs that change with the level of output.
FC-costs that remain fixed & do not change with the level of output.
3
Q
What is the gradient of the TC curve?
A
MC curve
4
Q
Give 2 examples of VC & FC.
A
VC-wages & raw materials.
FC-salaries & rent
5
Q
Define general costs.
A
Payments that firms must make for the use of factors of production.
