ECON 003 Lecture Notes - Lecture 6: Marginal Cost, Fixed Cost, Taipei Metro
Document Summary
Chapter 8: costs and the supply of goods. Categories of costs: 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, ex. Insurance premiums, property taxes, etc: total variable costs (tvc): the sum of those costs that change with output, ex. Wages, raw materials, food (more people, more food: average variable costs (avc): total variable costs divided by the number of units produced, one can get total costs (tc) by adding together total fixed costs (tfc) and total. Way to fill out chart on test: tfc does not change, tvc at 0 is sh, tc= tfc+tvc, calculate an average. 3. 75: remember that atc is u- shaped, afc falls with output, avc is small part of atc when output is small and a large part of atc when output is.
