# Average costs, variable costs, fixed costs, total costs

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• Created on: 17-11-12 14:20

## 1. What is marginal cost?

• Marginal cost is the change in total cost that occurs when output is changed by one unit.
• Marginal cost is the unit cost of production.
• Marginal cost are costs that vary directly with output produced.
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## 2. What is long run?

• Time period when all factor inputs can be changed
• Time period when a firm is unable to change factors of production except for one, usually labour.
• Time period when the lowest level of output where long-run average cost (LRAC) is minimised.

## 3. What is average cost and the equation?

• Average cost is the unit cost of production. Average cost = Total cost/quantity
• Average cost is the change in total cost that occurs when output is changed by one unit. Average cost = Quantity/total cost
• Average cost is the unit cost of production. Average cost = Total cost x quantity

## 4. What is the equation for total cost?

• Total cost = Fixed cost + Variable cost
• Total cost = Fixed cost/ Variable cost
• Total cost = Variable cost/Fixed cost

## 5. What are costs?

• The monetary value of inputs that are needed to produce a particular good or service
• The value of inputs that are needed to produce a good
• The revenue from inputs that are needed to produce a good or service