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Short Run Total Costs
answer
the sum of fixed costs and variable costs
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Average Total Costs
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TC/Q or AFC+AVC
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Average Variable Cost
answer
VC/Q
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Average Fixed Cost
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FC/Q
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Marginal Cost
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is the change in cost from a small increase in output
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Fixed Cost
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exist in the short run. They do not change with production levels
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Variable Cost
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Are costs that change with production levels. All costs are variable costs in the long run
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Constant Returns to Scale
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If we increase all of our inputs by N% and output increases by N%
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Increasing Returns to Scale
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If we increase our inputs by N% and output increase by more than N%
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Decreasing Returns to Scale
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If we increase all our inputs by N% and output increases by less than N% we have
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Average total cost is constant in the long run
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Constant Returns to Scale- if we double inputs we double costs but also double output
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Average total cost drops in the long run
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Increasing Returns to Scale- if we double inputs we double costs but more than double output
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Average total cost increases in the long run
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Decreasing Returns to Scale- if we double inputs we double costs but less than double output
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