Week 8

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.

Diminishing marginal returns

________________________ arises where many firms are competing in a market to sell similar but differentiated products.

Monopolistic competition

______________ include all of the costs of production that increase with the quantity produced.

Variable costs

In economics, a firm that faces no competitors is referred to as _________________.

a monopoly

In order to determine ____________, the firm's total costs must be divided by the quantity of its output.

average cost

The graph above illustrates the total cost function for Goodie Cookie Co. The changing slope of the total cost curve reflects this company's

decreasing marginal costs

If a solar panel manufacturer wants to look at its total costs of production in the short run, which of the following would provide a useful starting point?

divide total costs into two categories: fixed costs that can't be changed in the short run and variable costs that can be

A firm's ___________ consists of expenditures that must be made before production starts that typically, over the short run, _______________ regardless of the level of production.

fixed costs; do not change

Why would labor be treated as a variable cost?

producing larger quantities of a good or service generally requires more workers

If this information were used to create a total cost graph, the curve should (Refer to the table)

reflect all of the above.