Flashcards in Short-Run Costs 7.3-6 Hunter Parrott Deck (12):
1
Average Variable Cost
variable cost per unit of total product.
2
AVC calculation
divide variable cost at a given total product level by that total product
3
Does AVC determine if the output level is potentially profitable.
YES
4
Variable Cost
the wage cost required to prodice a given level of output, or the wages paid times the number of workers at each output level.
5
If total production is 10, and Variable cost is $2000, what is the AVC?
$200
6
AVC is a guide to show the firm whether a certain output level is ______
profitable
7
If the AVC is greater than the price of the product, would there be potential profit?
No Shot
8
if AVC is lower than the price, could the firm make a profit?
Yes
9
You can sell a TV at $150. If your' TP was 48 and your' VC was $6000, could it be profitable?
Yes
10
You can sell a TV for $150. If your' TP was 48 and your" VC was $8000, could it be profitable?
No
11
What tells the firm if the output level is potentially profitable?
AVC
12