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Definitions Key Terms Total revenue 1. Costs that do not vary with the quantity of output produced Total cost 2. Total revenue minus total cost Profit 3. The increase in total cost that arises from an extra unit of production Explicit costs 4. The property whereby long-run average total cost falls as the quantity Implicit costs of output increases Economic profit 5. The property whereby long-run average total cost stays the same as Accounting profit the quantity of output changes Production function 6. Input costs that do not require an outlay of money by the firm Marginal product 7. The increase in output that arises from an additional unit of input Diminishing marginal product 8. The market value of the inputs a firm uses in production Fixed costs 9. The property whereby long-run average total cost rises as the quantity Variable costs of output increases Average total cost 10. Fixed costs divided by the quantity of output Average fixed cost 11. Costs that vary with the quantity of output produced Average variable cost 12. The quantity of output that minimizes average total cost Marginal cost 13. The amount a firm receives for the sale of its output Efficient scale 14. The relationship between quantity of inputs used to make a good Economies of scale and the quantity of output of that good Diseconomies of scale 15. Variable costs divided by the quantity of output Constant returns to scale 16. Total cost divided by the quantity of output 17. The property whereby the marginal product of an input declines as the quantity of the input increases 18. Total revenue minus total cost, including both explicit and implicit costs 19. Total revenue minus total explicit cost 20. Input costs that require an outlay of money by the firm Copyright