question
short run
answer
the period of time during which at least one of a firm's inputs are fixed
question
long run
answer
the period of time in which a firm can vary all its inputs, adopt new technology, and increase or decrease the size of its physical plant
question
production function
answer
the relationship between the inputs employed by a firm and the maximum output it can produce with those inputs
question
marginal product
answer
the additional output a firm produces as a result of hiring one more variable input
question
law of diminishing returns
answer
the principle that, at some point, adding more of a variable input, such as labor, to a fixed input, such as capital, will cause the marginal product of the variable input to decline
question
average product
answer
the total output produced by a firm divided by the quantity of the variable input
question
total variable cost
answer
the costs that changes as output changes. The cost of the variable inputs
question
total fixed cost
answer
the costs that remains constant as output changes. The cost of the fixed inputs
question
marginal cost
answer
the change in a firm's total cost from producing one more unit of a good or service
question
average total cost
answer
Total cost divided by the quantity of output produced
question
average variable cost
answer
Total variable cost divided by the quantity of output produced
question
average fixed cost
answer
Total fixed cost divided by the quantity of output produced
question
economies of scale
answer
the situation when a firm's long run average cost falls as it increases the quantity it produces
question
constant returns to scale
answer
the situation in which a firm's long run average cost remains unchanged as it increases output
question
diseconomies of scale
answer
the situation in which a firm's long run average cost begins to increase as it increases output
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
