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Unformatted text preview: produces as a result of hiring one more worker. 3 Short-Run Cost Total Cost A firm’s total cost (TC): the cost of all the inputs a firm uses in production. Fixed costs (FC): costs that remain constant as output changes. Variable cost (VC): costs that change as output changes. TC(Q) = FC + VC(Q) Short-Run Cost Marginal Cost Marginal cost (MC): the change in the firm’s total cost for producing one more unit of a good or service. Average fixed cost (AFC): fixed costs divided by the quantity of output produced. Average variable cost (AVC): variable costs divided by the quantity of output produced. Average total cost (ATC): total cost divided by the quantity of output produced. ATC(Q) = AFC(Q) + AVC(Q)...
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This note was uploaded on 12/14/2010 for the course ECON 001 taught by Professor Stein during the Fall '07 term at UPenn.
- Fall '07