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### 21 Cards in this Set

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 Production function the relationship between the quantity of inputs a firm uses and the quantity of output it produces. fixed input input where the quantity is fixed and can't be varied. variable input input where the quantity can vary. long run time period where all inputs can be varied short run time period where at least 1 input is fixed total product curve shows how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input. marginal product the additional quantity of output that is produced by using one more unit of that input. diminishing returns to an input when an increase in the quantity of that input, holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input. fixed cost cost that doesnt depend on the quantity of output produced. it is the cost of the fixed input. variable cost a cost that depends on the quanity of output produced. it is the cost of the variable input. Total cost fixed cost + variable cost Total cost curve shows how total cost dpeneds on the quantity of output. Average total cost total cost/total output u shaped average total cost curve falls at low levels of output then rises at higher levels average fixed cost fixed cost/output Average variable cost variable cost/output minimum cost output the # of output when the average total cost is lowest. The min of the U shaped ATC curve long run atc curve the connectioin of all the short run atc curves economies of scale when the long run atc declines as output increases diseconomies of scale when the long run atc increases as output increases constant returns to scale whne the long run atc is constant as output increases