Term
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Definition
| A firm that is such a small part of the overall market that it cannot affect the price of a good. |
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Definition
| Land, labour, raw materials, physical equipment. |
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Term
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Definition
| technological relationship between inputs and output. |
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Term
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Definition
| Extra output by adding one more unit of input. |
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Term
| Law of Diminishing Marginal Returns |
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Definition
| As equal increments of input are added, there is a point beyond which the marginal product of that input will decrease. |
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Term
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Definition
| Average output of ALL of the workers (e.g. total output/# of workers) |
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Term
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Definition
| Costs that do not vary with the level of output (e.g. rent). |
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Term
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Definition
| Total fixed cost divided by quantity produced. |
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Term
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Definition
| Costs that do vary with the level of output. Any cost the firm can change is a variable cost. As output increases, so do variable costs. |
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Definition
| Extra cost of the last unit produced. Marginal cost is the same as the addition to the variable costs as output rises. |
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Definition
| Total variable cost divided by the quantity of output. |
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Term
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Definition
| Total cost divided by the quantity of output. |
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Term
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Definition
| Extra revenue from selling an additional unit of output. Marginal revenue is constant and equal to the price. |
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Term
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Definition
| The minimum point of the Average Variable Cost curve. |
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