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Meanings and Terms of Costs
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13
Economics
Undergraduate 2
04/22/2015
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Term
accounting profit
 Definition
total revenue minus total explicit cost
Term
average fixed cost
 Definition
fixed costs divided by the quantity of output
Term
average total cost
 Definition
total cost divided by the quantity of output
Term
average variable cost
 Definition
variable costs divided by the quantity of output
Term
economic profit
 Definition
total revenue minus total cost, including both explicit and implicit costs
Term
explicit costs
 Definition
input costs that require an outlay of money by the firm
Term
fixed costs
 Definition
costs that do not vary with the quantity of output produced
Term
implicit costs
 Definition
input costs that do not require an outlay of money by the firm
Term
marginal cost
 Definition
the increase in total cost that arises from an extra unit of production
Term
profit
 Definition
total revenue minus total cost
Term
total cost
 Definition
the market value of the inputs a firm uses in production
Term
total revenue
 Definition
the amount a firm receives for the sale of its output
Term
variable costs
 Definition
costs that do vary with the quantity of output produced
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