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9 Cards in this Set

  • Front
  • Back
Total cost
Cost of all resources including normal profit
Average total cost
TC / q
Calculation for TC
TC = TFC + TVC

TFC = total fixed cost
TVC = total variable cost
Calculation for ATC
ATC = AFC + AVC

ATC = TC/q
AFC = TFC/q
AVC = TVC/q
Marignal cost
increase in total cost resulting from a one-unit increase in output

MC = Change in TC/ change in q
In an average and marginal cost curves, where does the MC cross these curves
At the miniumum point for ATC and AVC
What would an increase in technology do to the cost curves?
Shift downward
What would an increase in resource price do to the cost curves?
shift upward
Draw a cost curve illustrating MC, ATC and AVC
MC intersects ATC and AVC at their minimums