ECON 2005 Lecture Notes - Lecture 16: Average Variable Cost, Average Cost, Sunk Costs
Document Summary
Fixed cost fc any cost that does not depend on the firm"s level of output (q) These costs are incurred even if the firm is producing nothing. Total fixed costs (tfc) the total of all costs that do not change with output, even if output is zero. Average fixed costs (afc) total fixed ost divided by the number of units of output; a per-uni tmeasure of fixed costs (always falling) Variable cost a cost that depends on output. Total variable cost total of all costs that vary with output in the short run. Average variable cost total variable cost divide by number of units of output. Total cost tc fixed cots plus variable costs. Average total cost atc or ac total cost divided by the number of units of output. Marginal costs (mc) the increase in total cost that results from producing one more unit of output. How much does tc rise if you increase by one more unit.
