ECON1101 Chapter Notes - Chapter 13: Opportunity Cost, Fixed Cost, Marginal Cost
Document Summary
They measure the explicit costs but often ignore the implicit costs. The cost of capital as an opportunity cost: an implicit cost of almost every business is the opportunity cost of the financial capital that has been invested in the business. How an economist views a firm how an accountant views a firm. Revenu e: long run: the period needed for all factors of production to become variable, short run: a period during which at least one factor of production is fixed. Fixed and variable costs: fixed costs: costs that do not vary with the quantity of output produced, variable costs: costs that vary with the quantity of output produced. Costs in the short run and in the long run. The relationship between short-run and long-run average total cost. Costs that require an outlay of money by the firm. Costs that do not require an outlay of money by the firm.
