microeconomics cost analysis

explicit

accounting costs, monetary costs, paid out of pocket, labor costs, raw materials"more direct costs"

replacement cost

cost it would take to replace the used car, already has depreciated, so it is not worth as much as it used to be

sunk cost

cost you have already put in you can't get back in the short term, rent , license fees, property tax, insurance

fixed cost

costs that do not vary with quantity of output produced

variable costs

costs that vary with the quantity of output produced

average fixed cost

fixed cost divided by the quantity of output

production function

mathematical relationship between the mix of inputs and the level of output

economies of scale

more units of output can be produced on a larger scale

implicit

opportunity costs, interests, wages , rent depriciation, what you already have and use house for business purposes, value economically, owners wage,

law of diminishing return

return or marginal product is the increase in total output as a result of hiring one additional worker

diseconomies of scale

situation in which economies of scale no longer function for a firm, the firm experiences an increase in marginal wage cost when output increased excessively

total revenue

the amount a firm receives for the sale of its output

marginal product

the increase in output that arises from an additional unit of input

marginal cost

the increase in total cost that arises from an extra unit of production

total cost

the market value of the inputs a firm uses in production

constant returns to scale

the property whereby long-run average total cost stays the same as the quantity of output changes

diminishing marginal product

the property whereby the marginal product of an input declines as the quantity of the input increases

efficient scale

the quantity of output that minimizes average total cost

average total cost

total cost divided by the quantity of output

cost analysis

total profit=total revenue-total cost

accounting profit

total revenue-explicit costs

economic profit

total revenue-explicit costs and implicit costs

profit

total revenue-total cost

average variable cost

variable cost divided by the quantity of output

historical cost

what you paid for your house initially