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