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Questions and Answers
What is the total product?
What is the total product?
The total quantity of output produced by a firm.
What is marginal product?
What is marginal product?
Is the extra or additional output resulting from one additional unit of the variable input (usually labor).
What is the formula for marginal product?
What is the formula for marginal product?
MP = Change in Total Product (TP) / Change in variable units (labor).
What is the average product?
What is the average product?
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What is the formula for average product?
What is the formula for average product?
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What is total cost?
What is total cost?
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What is the formula for total cost?
What is the formula for total cost?
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What is average costs?
What is average costs?
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What is the formula for average fixed cost?
What is the formula for average fixed cost?
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What is the formula for average variable cost?
What is the formula for average variable cost?
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What is the formula for average total cost?
What is the formula for average total cost?
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What is the relationship between average total cost?
What is the relationship between average total cost?
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What is marginal costs?
What is marginal costs?
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What is the formula for marginal costs?
What is the formula for marginal costs?
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Study Notes
Production Concepts
- Total Product: Represents the overall quantity of goods produced by a firm.
- Marginal Product: Refers to the additional output produced when one more unit of a variable input (usually labor) is employed.
- Marginal Product Equation: Calculated as the change in Total Product divided by the change in variable units (labor).
Average Product
- Average Product: Indicates the quantity of output produced per unit of variable input (labor).
- Average Product Equation: Determined by dividing Total Product by the number of variable units (labor).
Costs
- Total Cost: The cumulative sum of fixed costs and variable costs associated with production.
- Total Cost Equation: Defined as Total Cost equals Fixed Cost plus Variable Cost.
Average Costs
- Average Costs: Obtained by dividing total costs by the quantity of output produced.
- Average Fixed Cost Equation: Average Fixed Cost equals Total Fixed Cost divided by Quantity.
- Average Variable Cost Equation: Average Variable Cost equals Total Variable Cost divided by Quantity.
- Average Total Cost Equation: Average Total Cost equals Total Cost divided by Quantity.
- Relationship: Average Total Cost can also be derived from adding Average Fixed Cost and Average Variable Cost.
Marginal Costs
- Marginal Costs: Defined as the additional cost incurred from producing one more unit of output.
- Marginal Cost Equation: Calculated by finding the change in Total Cost divided by the change in quantity produced or alternatively, the change in Total Variable Cost divided by the change in quantity.
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Description
Test your knowledge on key concepts related to production, costs, revenues, and profits with these flashcards. Each card presents definitions and equations that are essential for understanding economic production dynamics.
