Costs in Transport Economics
- Created by: TessAni
- Created on: 18-01-13 11:41
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- Costs
- Types of Cost
- Variable - vary with the level of output
- Fixed - remain the same despite changes in output
- Marginal Cost - the change in total cost when one more unit of output is produced
- Average Cost - the unit cost of production
- Long Run
- Average Fixed Cost curve falls consistently, which is indicative of how total fixed costs are spread out as output increases
- Average variable costs will eventually outweigh the effect of the falling average fixed cost curve causing the average cost curve to rise
- Output increases, average variable costs will initially decline and then rise again
- The marginal cost curve always crosses the average variable cost and average cost curves at their lowest point
- Types of Cost
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