ECON 1B03 Lecture Notes - Lecture 5: Average Cost, Average Variable Cost, Marginal Cost
29 Jan 2020
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Marginal product
the increase in output that arises from an additional unit of input
Diminishing marginal product
the property whereby the marginal product of an input declines as the
quantity of the input increases
Fixed costs
costs that do not vary with the quantity of output produced
Variable cost
costs that vary with the quantity of output produced
Average total cost
total cost divided by the quantity of output
Average fixed cost
fixed costs divided by the quantity of output
Average variable cost
variable costs divided by the quantity of output
Marginal cost
an increase in total cost that arises from an extra unit of production
Efficient scale
the quantity of input that minimizes average total cost
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ECON 1B03 Full Course Notes
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Document Summary
Marginal product the increase in output that arises from an additional unit of input. Diminishing marginal product the property whereby the marginal product of an input declines as the quantity of the input increases. Fixed costs costs that do not vary with the quantity of output produced. Variable cost costs that vary with the quantity of output produced. Average total cost total cost divided by the quantity of output. Average fixed cost fixed costs divided by the quantity of output. Average variable cost variable costs divided by the quantity of output. Marginal cost an increase in total cost that arises from an extra unit of production.
