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Total fixed cost(TFC)
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All costs that do not change when output changes. TFC is a constant amount at all Q levels ex: rent. [TFC=Q x AFC]
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Total Variable Cost(TVC)
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All costs that do change when output changes. TVC gets bigger as Q increase because the firm needs more labor to make more output ex:Wages,hiring, workers. [TVC=Q x AVC]
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Total Cost(TC)
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All costs at a given output level. TC is the sum of TFC(total fixed costs)and TVC(Total Variable Cost). TC increases as the level of output.
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Average Fixed Cost(AFC)
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Fixed Cost(capital cost) per unit of output. AFC always falls as Q rises since TFC is a constant value.
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Average Variable Cost(AVC)
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Variable cost (labor cost) per unit of output . AVC falls at first, and then rises as Q increases.
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Average Total Cost(ATC)
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Total Cost per unit of output. It is the sum of Average Fixed Cost(AFC) and Average Variable Cost(AVC). ATC falls at first, and then rises as Q increases. ATC=TC/Q ATC=AFC+AVC
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Marginal Cost(MC)
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Change in the firm's TC when it produces another unit of output. Also shows change in Total variable cost (TVC) from an extra unit of output. Mac falls at first and then rises as Q increases. MC=TV/Q.
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Explicit Cost
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Expenditure by the firm; It could be a payment for items such as wages and rent
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Implicit Cost
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The opportunity cost of an entrepreneur using his/her own resources in the company
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Perfect Competition
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buyers and sellers are so numerous and well informed that all elements of monopoly are absent and the market price of a commodity is beyond the control of individual buyers and sellers.
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Feedback
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Q
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Quantity
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Monopolistic
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Characterizes an industry in which many firms offer products or services that are similar but not perfect substitute.
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Oligopoly
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a state of limited competition, in which a market is shared by a small number of producers or sellers.
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Monopoly
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Exclusive control by one group of the means of producing or selling a commodity or service
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Total Product
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Total product (also known TPP) is defined as the total quantity of output produced by a firm in the given inputs
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Average product
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Average product, which occasionally goes by the alias average physical product (APP)Average product is the per unit production of a firm.
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Marginal Product
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marginal product or marginal physical product of an input (factor of production) is the change in output resulting from employing one more unit of a particular input.
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Econ. Profit
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An economic profit or loss is the difference between the revenue received from the sale of an output and the opportunity cost of the inputs used.
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Accountant Profit
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Accounting profit is the monetary costs a firm pays out and the revenue a firm receives
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Normal Profit
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normal profit is the minimum level of profit needed for a company to remain competitive in the market.
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