| A | B |
|---|
| Fixed factor | An input that cannot be increased in supply within a given time period |
| Varibale factor | An input that can be increasedin supply within agiven time peiod |
| Short run | The period of time over which at last one factor is fixed |
| Long run | The period long enough for all factors to be varied |
| Law of diminishing ( marginal) retunes | When one or more factors are held fixed, therewill come a point beyond which the extra output from additional units of the varibale factor will diminish |
| Opportunity cost | Cost measured in terms of of the best alternative forgone |
| Explicit cost | The payment to outsides suppliers of inputs |
| Implicit costs | Costs that do not involve a direct Payment of money to a third party, but which nevertheless involve a scrifice of some alternative |
| Historic costs | The original amount the firm paid for factors now owns |
| Fixed costs | Total costs That do not vary with the amount of output produced |
| Variable costs | Total costs that that do vary with the amount of output pruduced |
| Total costs | The sum of total fixed costs and total varible costs TC= TFC +TVC |
| Aveage (total) costs | Total cost(fixed plus variable) per unit of output : AC=TCIQ=AFC+AVC |
| Average fixed cost | Total fixed cost per unit of output: AFC=TFCIQ |
| Average variable | Total variable cost per output : AVC= TVCIQ |
| Marginal cost | Marginal of producing one more unit of output: MC = TCI Q |
