ECON 202 Study Guide - Final Guide: Marginal Utility, Nash Equilibrium, Normal-Form Game
Document Summary
Fixed cost: does not depend on the quantity of output produced; is the cost of the fixed input. Variable cost: depends on the quantity of output produced; is the cost of the variable input. Total cost: producing a given quantity of output is the sum of the fixed cost and variable cost of producing that output. Total cost curve: steepens as more output is produced; due to diminishing returns. Marginal cost= = to rise (increase in total cost)/by run ( increase in quantity of output) Intersects the average total cost curve from below, crossing it at its lowest point. U-shaped average total cost curve- falls at low levels of output, then rises at higher. Average fixed cost: fixed cost per unit of outpu. Average variable cost:variable cost per unit of output. Spreading effect: the larger the output, the greater the quantity of output over which fixed cost is spread, leading to lower average fixed cost.
