Unit 3_ The Cost of Supplying Resources _Two More Factor Cost - WebCOM\u2122 2 - Oklahoma State University Advance Programmed Learning System(APLS

# Unit 3_ The Cost of Supplying Resources _Two More Factor Cost - WebCOM™ 2

This preview shows page 1 - 2 out of 2 pages.

Oklahoma State University Advance Programmed Learning System (APLS) Amos-Amos Two More Factor Cost The Highlights Two measures derived from total factor cost are average factor cost and marginal factor cost. The definition of average factor cost. Average factor cost is the total factor cost per unit of factor input, found by dividing total factor cost by the quantity of factor input. The formula for average factor cost (AFC): AFC = total factor cost (TFC) factor quantity (FQ) Average factor cost is another way of saying factor price. The definition of marginal factor cost. Marginal factor cost is the change in total factor cost resulting from a change in the quantity of factor input, found by dividing the change in total factor cost by the change in quantity of factor input. The formula for marginal factor cost (MFC): MFC = change in total factor cost change in factor quantity Marginal factor cost is the change in the total factor cost from a change in factor quantity.  #### You've reached the end of your free preview.

• Fall '14
• Dr.OrleyAmos
• Economics, AFC, factor cost
• • •  