Micro - Chap. 7

physical space for the gallery

Marcella operates a small, but very successful art gallery. All but one of the following can be classified as a variable cost arising from the physical inputs Marcella requires to operate her business. Which is it?

total revenue

___ is calculated by the taking the quantity of everything that is sold and multiplying it by the sale price.

average cost

____ tells a firm whether it can earn profits given the price in the market

Explicit Costs

cash expenditures a firm makes to pay for resources are called:

the opportunity costs of using factors that a producer does own buy or hire but already owns.

implicit costs are

cost structure

the ____ of all firms can be broken down into something common underlying patterns

economies of sale

the term ____ describes a situation where the quantity of output rises, but the average cost of production falls.

sunk costs

which of the following should typically be ignored because spending has already been made and cannot be changed?