LS3 Flashcards
1
Q
What counts as the short run?
A
Period of time where the firm is free to vary inputs of variable factors but not fixed. 1 FOP
2
Q
What counts as the long run?
A
All factors can be varied
3
Q
What is the law of diminishing returns?
A
When a variable FOP increases while the others stay the same so marginal returns decrease
4
Q
Difference between fixed and variable costs
A
Fixed costs don’t vary with output while variable do.
In the long run all are variable
5
Q
What is average cost?
A
Cost per unit produced
6
Q
What is marginal cost?
A
Cost of producing 1 extra unit
7
Q
What is total revenue?
A
Total money from sales
8
Q
What is marginal revenue?
A
Extra revenue gained from selling 1 extra unit
