Average costs, variable costs, fixed costs, total costs
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?- Created by: Jade
- Created on: 17-11-12 14:20
Other questions in this quiz
2. 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
3. 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.
4. 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.
5. What are variable costs?
- Costs that vary directly with output produced e.g. labour, fuel, raw material costs
- Costs that are independent of output produced e.g rent, interest paid on loans
- The total cost of production or provision of a service
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