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Chapter 11: Output and Costs, Product schedules
•Total product is the max…
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Product schedules
•Total product is the max output that a given quantity of labour can produce
•Marginal product of labour is the increase in total product that results from a one-unit increase in the quantity of labour employed, all other outputs remaining the same
•Average product shows how productive workers are on average
AP = Total product ÷ quantity of labour employed
Total cost: cost of all the factors of production a firm uses
-sum of fixed (cost of fixed factors of production) and variable cost (cost of variable factors of production)
Marginal cost: the increase in total cost that results from a one-unit increase in output (MC = increase in TC ÷ increase in output)
Average cost: total cost per unit of output
-sum of average fixed cost and average variable cost
A firm's cost curves (TC, AC & MC) describe the relationship between its output and costs and a firm's revenue curves (MR and TR) describe the relationship between its output and revenue