Short Run Costs Flashcards
(9 cards)
1
Q
What are Fixed Costs?
A
Costs that do not vary with output; the total costs incurred when output is zero
2
Q
What are Variable Costs?
A
Costs that vary directly with output
3
Q
What is the Short-Run?
A
The period of time in which at least one factor of production is
fixed
4
Q
What is the Long-Run?
A
The period of time in which all factors of production are variable
5
Q
Average total costs ATC = ___ + ___
A
AFC + AVC
6
Q
AFC increases/decreases with output
A
decreases
7
Q
Total costs TC = ___ + ___
A
TFC + TVC
8
Q
Total Variable Costs TVC increase/decrease as output rises
A
Increase
9
Q
What are Marginal Costs?
A
Marginal cost (MC) is the change in total costs when output increases by one unit.
MC = change in total costs/change in output
