Profit maximisation Flashcards
1
Q
Marginal product of input
A
Increase in output given from an additional unit of production
2
Q
Diminishing marginal product
A
The marginal product of an input declines as quantity of input increases (e.g. keep increasing pizza workers quant output diminishes)
3
Q
Formula for Total Costs =
A
Fixed costs + variable costs
4
Q
Marginal revenue
A
Change in total revenue from an additional unit sold
5
Q
Formula marginal revenue =
A
Change in total revenue / change in quantity sold
6
Q
Formula marginal cost =
A
Change in total cost / change in quantity
