Inputs And Costs Flashcards
1
Q
Long Run
A
All inputs varied
2
Q
Short run
A
At least one input fixed
3
Q
Marginal Product
A
Additional quantity of output produced by using one more unit of that input
4
Q
Diminishing return to an input
A
Increase in input quantity —> decline in the marginal product of that inputs
5
Q
Marginal Cost =
A
Change in Total Cost
——————————
Change in Quantity Output
6
Q
Spreading Effect
A
Larger Output
Fixed Cost more spread
Low Avarage Fixed Cost
7
Q
Diminishing Returns Effect
A
Larger Output
More Variable Input Required
High Average Variable Cost
8
Q
Minimum Cost Output
A
Average Total Cost = Marginal Cost
ATC = MC
9
Q
Increasing Returns to scale
A
ATC declines as output increases
10
Q
Decreasing returns to scale
A
ATC increases ass output increases
11
Q
Constant Returns to scale
A
ATC constant as output increases
