ECON 103 Lecture Notes - Lecture 16: Marginal Cost, Diminishing Returns, Marginal Product

• School: George Mason University
• Department: Economics
• Course: ECON 103
• Professor: Donald Boudreaux

Document Summary

Chapter 8: costs and the supply of goods cont. Short run and long run time period. A time period so short that a firm is unable to vary some of its factors of production. A time period long enough to allow the firm to vary all of its factors of production. Total fixed costs (tfc): the sum of the costs that do not vary with output. Fixed costs will remain unchanged as output rises or falls in the short run. Average fixed costs (afc): total fixed costs divided by the number of units produced. Afc = tfc / q average fixed costs always declines with output. Total variable costs (tvc): the sum of those costs that change with output. One can get total costs (tc) by adding together total fixed costs (tfc) and total variable costs (tvc) Average total costs (atc): total cost divided by the number of units produced.