Production Costs and Revenues Flashcards
average cost
total production cost divided by total output (cost per unit of output)
average revenue
total revenue divided by total output (revenue per unit of output)
capital productivity
output per unit of capital
diseconomies of scale
when long run average costs rise as output rises.
second half or AC curve
division of labour
different workers performing different tasks in a products production, specialising to an extent.
economy of scale
when long run average costs fall as output rises
first half of ac curve
external economy of scale
firms saving resulting from growth of the industry as a whole
fixed cost
costs of production that do not vary with output, only in the short run
internal Economy of scale
firms saving resulting from the growth of the firm itself
labour productivity
output per worker
long run
time period in which none of the factors of production are fixed, and can all be varied
long run average cost
long run total cost per unit of output
long run production
when a firm changes the scale of all factors of production
production
a set of processes that converts inputs into outputs
productive efficiency
minimised average total cost
