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Supply & Costs of Production
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As more and more of a variable input is added to a fixed input, the resulting additional output eventually decreases.
Diminishing Marginal Returns
Costs as defined by accountants are explicit costs.
Accounting Costs
the value of resources used in production for which explicit payments are made.
Explicit costs
Costs as defined by economists include both explicit and implicit costs.
Economic Costs
The value of resources used in production for which no explicit payments are made.
Implicit costs
Means that revenues are just covering explicit costs.
Zero Accounting Profits
Means that revenues are just covering all explicit and implicit costs.
Zero Economic Profits
A time period in which some inputs are fixed.
Short run
A time period long enough for all things to change.
Long run
the smallest level of output at which a firm can minimize long-run average costs.
Minimum Efficient Scale (MES)
______ Returns to Scale when long-run ATC is constant
Constant
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Author
FelipeJung
ID
337630
Card Set
Supply & Costs of Production
Description
Last Semester
Updated
2018-01-29T14:23:30Z
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