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Definition
| Things that firms can't change immediately. |
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| Period of time in which one factor of production is fixed. |
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| Period of time in which all factors of production are variable, but the state of technology is fixed. Planning takes place in this period. |
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| Things that firms can change quickly according to demand. |
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Term
| Law of Diminishing Return |
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Definition
| As extra units of a variable factor are added to a given quantity of a fixed factor, the output of each additional unit of variable factor will eventually diminish. |
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| The marginal cost is the cost of each additional unit of output produced. |
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| It is the extra output produced by one additional unit of input in a firm. |
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Definition
| The total cost of a particular level of output divided by the quantity produced. (AVC +AFC) |
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Definition
| The total cost of all variable products divided |
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