01:220:102 Study Guide - Final Guide: Marginal Cost, Fixed Cost, Diminishing Returns

• School: Rutgers University
• Department: Economic
• Course: 01:220:102
• Professor: M.Elgawly

Document Summary

A cost that does not depend on the quantity of output produced. It is the cost of the fixed input. A cost that does not vary with output. A cost that depends on the quantity of output produced. It is the cost of the variable input. The total cost of producing a given quantity of output is the sum of the fixed cost and the variable cost of producing that quantity of output. The total cost curve becomes steeper as more output is produced, a result of diminishing returns. The marginal cost is the change in total cost generated by one additional unit of output. Total cost per unit of output produced. Fixed cost per unit of output produced. Variable cost per unit of output produced. Economic profit as it relates to price and atc. Atc is the most important cost for firms to consider. As long as p > atc, it is profitable.