Supply & Costs of Production

As more and more of a variable input is added to a fixed input, the resulting additional output  eventually decreases.

Costs as defined by accountants are explicit costs.

the value of resources used in production for which explicit payments are made.

Costs as defined by economists include both  explicit and implicit costs.

The value of resources used in production for which no explicit payments are made.

Means that revenues are just covering explicit costs.

Means that revenues are just covering all explicit and implicit costs.

A time period in which some inputs are fixed.

A time period long enough for all things to change.

the smallest level of output at which a firm can minimize long-run average costs.

______ Returns to Scale when long-run ATC is constant