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Business Costs and Production

Across
is calculated by subtracting explicit costs from total revenue
is the output level that minimizes the average total cost in the long run
is determined by dividing total fixed cost by the output
is the increase in cost that occurs from producing one additional unit of output
occur when long-run average total costs remain constant as output expands
average total cost
is calculated by subtracting both the explicit cost and the implicit costs of business from total revenue
occurs when long-run average total cost rises as output expands
costs of resources already owned, for which no out-of-pocket payment is made
Down
amount firm spends to produces and/or sell G&Ss
occur when long-run average total costs rise as output expands
is the product that the firm creates
the amount a firm receives from the sale of G&Ss
are unavoidable; they do not vary with output in the short run; AKA “overhead”
are the inputs (labor, land, and capital) used in producing G&Ss
change with the rate of output
when total revenue is higher than total costs
refers to the size of the production process
when total revenue is less than total costs