01:220:102 Lecture Notes - Lecture 11: Marginal Product, Diminishing Returns, Fixed Cost

• School: Rutgers University
• Department: Economic
• Course: 01:220:102
• Professor: Rubin

Document Summary

Increasing output has two opposing effect on average total cost. The relationship between the quantity of inputs a firm uses and the quantity of output it produces. An input whose quantity is fixed for a particular period and cannot be varied. An input whose quantity can be varied at any time. Period in which all inputs can be varied. Period in which at least one input is fixed. Shows how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input. The additional quantity of output that is produced by using one more unit of that input. When an increase in the quantity of that input holding the levels of all other inputs fixed leads to a decline in the marginal product of that input. Is a cost that does not depend on the quantity of output produced. Is a cost that depends on the quantity of output produced.