production
total revenue minus the explicit costs of production is ____ profit
accounting
in making a decision about how much output it should produce to maximize its profits, which two pieces of information does a firm need?
The extra benefit of producing that unit; the extra cost associated with producing an additional unit of output
the short run is
a period of time in which at least one input of production is fixed
zero_____profit means that the value of economic profit is negative
accounting
marginal product is the
additional output produced as a result of utilizing one more unit of a variable resource
average product is the
amount of output produced per unit of a resource employed
in addition to total cost, it is useful to calculate average total cost because
average cost can be compared directly to the price, average cost numbers are more useable for managing
total fixed cost divided by the amount of output produced is equal to
average fixed cost
total cost per unit is equal to
average total cost
Variable cost per unit is equal to
average variable cost
total variable cost divided by the amount of output produced is equal to
average variable cost
monetary payments made by individuals, firms, and governments for the use of others' land, labor, capital, and entrepreneurial ability are ______ costs
explicit
Total revenue minus the total _____ and total _____ costs of production is economic profit
explicit and implicit
economic costs can be defined as the sum of ____ and ___ costs
explicit; implicit
marginal cost is the
extra or additional associated with the production of an additional unit of output
total cost equals _____ cost plus total_____ cost
fixed; variable
the opportunity cost of using owned resources are ____ costs
implicit
the shape of the marginal cost curve is dependent on the
law of diminishing marginal returns
average _____ cost always declines as a firm produces more output
marginal
decreasing _____ returns are a characteristic of production whereby the marginal product of the next unit of a variable resource utilized is less than that of the previous resource
marginal
increasing _____ returns is a characteristic of production whereby the marginal product of the next unit of a variable resource utilized is greater than that of the previous variable resource
marginal
when the ___ cost falls below the ____ cost, the average cost should be decreasing
marginal; average
zero accounting profit means that the value of economic profit is
negative
costs that change the amount of _______ produced are variable costs
output
costs that do not change with the amount of ______ produced are fixed costs
output
total revenue equals
price times quantity
The total amount of output produced with a given amount of resources is known as the total
product
being able to calculate total product, average product, and marginal product is important
to operate efficiently and maximize profits
negative _____ profits encourage firms to exit the market
economic
positive ______ profits encourage more firms to enter the market to produce goods and services
economic
total revenue minus the explicit and implicit costs of production is _____ profit
economic
zero _____ profit is the revenue needed for a company to break even and meet operating costs without a loss
economic
