Chapter 11- The Firm: Production and Costs Flashcards
Explicit Costs
the opportunity costs of production that require a monetary payment
Implicit Costs
the opportunity costs of production that do not require a monetary payment
profits
the difference between total revenues and total costs
accounting profits
total revenues minus total explicit costs
economic profits
total revenues minus explicit and implicit costs
sunk costs
costs that have been incurred and cannot be recovered
fixed costs
costs that so not vary with the level of output
total fixed costs(TFC)
the sum of the firms fixed costs
variable costs
costs that vary with the level of outputs
total variable cost(TVC)
`the sum of the firms variable costs
total cost(TC)
the sum of the firms total fixed costs and total variable costs
average total cost(ATC)
a per-unit cost of operation; total cost divided by output
average fixed cost(AFC)
a per-unit measure of fixed costs; fixed costs divided by output
average variable cost(AVC)
a per-unit measure of variable costs; variable costs divided by output
marginal cost(MC)
the change in total costs resulting from a one-unit change in output