Chapter 10: Theory of The Firm - Custom Scholars
Home » Flash Cards » Chapter 10: Theory of The Firm

# Chapter 10: Theory of The Firm

question
short run
the time period in which at least one input is fixed
question
long run
the time period in which all inputs can be varied
question
production
The process of converting inputs (resources) into outputs (goods and services).
question
average product
output per worker (Q/L)
question
marginal product
extra output produced when another worker is hired (Q2-Q1 / L2-L1)
question
law of diminishing returns
When additional units of a variable input are added to fixed inputs after a certain point, the marginal product of the variable input declines.
question
total fixed cost
are fixed costs that do not vary or change w/ level of output
question
total variable cost
costs that do vary or change w/ level of output
question
total cost
fixed costs plus variable costs
question
average fixed cost (AFC)
fixed cost per unit of output (FC/Q)
question
average variable cost (AVC)
variable cost per unit of output (VC/Q)
question
average total cost (ATC)
AFC + AVC
question
marginal cost
the cost of producing one more unit of a good
(TC2 - TC1 / Q2 - Q1)
question
economics of scale
cost per unit decreases as output increases
question
constant returns to scale
when long-run average total cost is constant as output increases
question
diseconomies of scale
cost per unit increases as output increases
1 of 16
question
short run
the time period in which at least one input is fixed
question
long run
the time period in which all inputs can be varied
question
production
The process of converting inputs (resources) into outputs (goods and services).
question
average product
output per worker (Q/L)
question
marginal product
extra output produced when another worker is hired (Q2-Q1 / L2-L1)
question
law of diminishing returns
When additional units of a variable input are added to fixed inputs after a certain point, the marginal product of the variable input declines.
question
total fixed cost
are fixed costs that do not vary or change w/ level of output
question
total variable cost
costs that do vary or change w/ level of output
question
total cost
fixed costs plus variable costs
question
average fixed cost (AFC)
fixed cost per unit of output (FC/Q)
question
average variable cost (AVC)
variable cost per unit of output (VC/Q)
question
average total cost (ATC)
AFC + AVC
question
marginal cost
the cost of producing one more unit of a good
(TC2 - TC1 / Q2 - Q1)
question
economics of scale
cost per unit decreases as output increases
question
constant returns to scale
when long-run average total cost is constant as output increases
question
diseconomies of scale
cost per unit increases as output increases

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

## Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.