F584: Costs

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  • Created by: Natan21
  • Created on: 14-07-15 09:52

Fixed costs (FC)

Costs that are independent of output produced.

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Variable costs (VC)

Costs that are directly dependent on output produced.

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Total costs (TC)

Total cost of production or provision of a service.

=FC+VC

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Average costs (AC)

Unit cost of production at given output level.

=TC/Output

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Marginal costs (MC)

Cost of producing one additional unit.

=Qn+1 –Qn=MC

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