Problem 41

Introduction

Total output – The units of product produced by the company.

Total cost – The overall cost of producing each level of output.

Marginal cost – The additional cost required to produce an extra unit of output.

Average cost – The per unit total cost of production.

Average variable cost – It refers to per unit variable cost of production.

Zero-profit point– The level of output for which the profit level is zero.

Shutdown point – The level of output for which the firm cannot even recover the average variable cost.