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9 Cards in this Set
- Front
- Back
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Total cost
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Cost of all resources including normal profit
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Average total cost
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TC / q
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Calculation for TC
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TC = TFC + TVC
TFC = total fixed cost TVC = total variable cost |
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Calculation for ATC
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ATC = AFC + AVC
ATC = TC/q AFC = TFC/q AVC = TVC/q |
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Marignal cost
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increase in total cost resulting from a one-unit increase in output
MC = Change in TC/ change in q |
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In an average and marginal cost curves, where does the MC cross these curves
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At the miniumum point for ATC and AVC
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What would an increase in technology do to the cost curves?
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Shift downward
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What would an increase in resource price do to the cost curves?
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shift upward
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Draw a cost curve illustrating MC, ATC and AVC
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MC intersects ATC and AVC at their minimums
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