Flashcards in Short-Run Costs 7.3-10 Hunter Parrott Deck (15)
The average cost curves summarize unit costs and ___________.
The _____ curves are mirror images of the productivity curves.
The important average cost curves are ___, ___, and ___.
AFC, AVC, ATC
Each of these is calculated by dividing the appropriate cost by _____ ____
In the decreasing portion of the average cost curves on the left, costs fall because
1. increasing output is spreading the fixed costs over more units; thus, average fixed—and therefore average total—costs are falling;
2. additional workers are increasingly productive.
In the _________ portion of the total cost curves on then left, costs are increasing because additional workers are less productive than the previous ones.
Even though fixed costs (FC) remain the same, the ______ ___ are increasing at an increasing rate
The vertical difference between the ATC curve and the AVC curve is the area between the two curves. This area is?
as production _________, the AFC shrinks
In the rising portion of the ATC curve, AVC is increasing faster than AFC is falling, thus pushing the ATC curve (up, down).
When AVC and ATC are falling, MC must be _____ the average cost curves