Short Run Costs Curve Flashcards
1
Q
What are total costs
A
Total costs are the sum of tFC AND TVC
2
Q
What is marginal costs
A
The cost of producing one more additional unit
Calculated via change in total costs over change in output
3
Q
Draw a short run cost curve
A
Sick bro
4
Q
Explain the shape of marginal cost curve
A
- law of diminishing returns
- at first we hire people leading to American, gains due to specialisation and underutilisation however the w e are constrained and productivity decreases which leads to costs increasing
