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10 Cards in this Set
- Front
- Back
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Short run
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A period to brief for the firm to alter its plant capacity, yet long enough to permit a degree of change.
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Long run
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period long enough for it to adjust the quantities of all recourses that it employs, including plant capacity.
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Law of diminishing returns
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Assumes that technology is fixed and thus the techniques of production do not change.
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Total product
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total quantity, or total output
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Marginal product
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the extra output or added product associated with adding a unit of a variable resource.
( change in total product/ the change in labor input) |
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Average total product
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total product/ number labor units needed to produce it
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Fixed costs
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the total costs that in total do not vary with changes in output
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Total cost
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Sum of the fixed cost and the variable cost
TC=TFC+TVC |
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Marginal cost
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the extra cost of producing an extra unit of output.
MC= change in TC/ Change in Q |
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Diseconomies of scale
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The difficulty of efficiently controlling and coordinating a firms operation as it becomes a larger scale production
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