| A | B |
|---|
| TFC + TVC = | TC |
| TFC / Q (TP) = | AFC |
| TVC / Q (TP) = | AVC |
| CHG TC / CHG Q (TP) = | MC |
| ATC | AFC + AVC |
| MP | CHG TP / CHG Q (L) |
| TP / Q (L) = | AP |
| FC | Those costs considered to be independent of output |
| VC | Those costs that vary directly with output |
| Those costs that continue to decline of the range (increasing) of output | AFC |
| Those costs that BEST reflect the per unit costs of PRODUCTION | AVC |
| Those costs that explain the costs specifically associated with the next units to be produced (or not) | MC |
| The Production Function | The physical relationship that exists between inputs and outputs |
| economic costs | implicit costs |
| explicit costs | those "out-of-pocket" expenses that must be paid |
| the minimum costs necessary for a firm to maintain their production factors | normal profits |
| TR-TC(TE--explicit only) | Accounting Profits |
| TR-T explicit +T implicit = | economic profits |
| least cost position | minimum AVC |
