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cost function
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mathematical description of how a cost changes with changes in the level of an activity relating to that cost
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isocost lines
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shows all combinations of inputs which have the same total cost
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conditional factor demand functions
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measure the relationship between the prices and output and the optimal factor choice of the firm, conditional on the firm producing a given level of output, y
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unit cost function
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a function that describes the most cost minimizing way(s) to produce one unit of a good or service
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average cost function
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The cost per unit when x units of a certain product are produced
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short run cost function
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A function that defines the minimum possible cost of producing each output level when variable factors are employed in the cost-minimizing fashion.
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long run cost function
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a function that describes the minimum cost of producing a given level of output, adjusting all of the factors of production
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fixed costs
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costs that remain constant as output changes
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quasi fixed costs
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Costs that are also independent of the level of output, but only need to be paid if the firm produces a positive amount of output.
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sunk cost
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a cost that has already been committed and cannot be recovered
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The difference between how economists model profit maximization and cost minimization for a firm is
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Profit maximization results in a choice of how much to produce, while cost minimization results in the lowest cost to produce a particular level of output.
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