Week 6 Flashcards
(12 cards)
Law of supply
Firms willing to produce and sell a greater quantity of a good when the price of good is high =supply curve that slopes upwards
Production Function
Relationship between the quantity of outputs and inputs a
Marginal product
increase in output that arises from additional unit
Diminishing marginal product
the property whereby the marginal product of an input declines as the quantity of input increases
Total cost curve
Relationship between the quantity of output produced and the total cost of production
Marginal cost
Increase in total cost that arises from an extra unit of production
Economies of scale
Long-run average total cost falls as quantity of output increases
Diseconomies of scale
Whereby long-run average total cost rises as output increases
Constant returns to scale
Stays the same
Sunk cost
A cost that has been committed and cannot be recovered
Exit market if..
TR
Exit if
P
