Econ: Costs and Revenue

Marginal Cost (MC)=

(Change in TC)/(Change in Q)

Marginal Revenue (MR)=

(Change in TR)/ Q

If a firm adds workers to increase production, more ________________ must be added to minimize the affects of the law of diminishing marginal returns.

Capital

Total Cost (TC)=

FC+FV

An example of a fixed cost is ________________________

Insurance Payment

According to economists, a business should continue to produce additional units of a good until _________________ _____________ is equal to _______________ ________________

Marginal cost; Marginal Revenue

In Economics, the word _________________________ means additional, so _______________ __________________ is the cost of producing an additional unit of a good and ___________________ ______________________ is the revenue from selling an additional unit of a good

Marginal; Marginal cost; marginal revenue

Total Revenue (TR)=

P x Q

According to the law of diminishing marginal returns, if additional units of one ________________, such as labor, are added to another ___________________ in fixed supply, such as capital, eventually the additional output (produced as a result of hiring an additional worker) will __________________

Resource; Resource; Decrease

Every firm wants to maximize _____________________

Revenue

A fixed cost ___________________ no matter how many units of a good are produced.

Stays the same

Average total cost (ATC)=

TC/Q

Profit (or Loss)=

TR-TC

An example of a Variable cost is ___________________

bread

A Variable cost ___________________________ with the number of units of a good produced

changes