{"id":2472,"date":"2015-06-23T22:40:35","date_gmt":"2015-06-23T22:40:35","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterymicro1xngcxmaster\/?post_type=chapter&p=2472"},"modified":"2015-12-17T21:46:21","modified_gmt":"2015-12-17T21:46:21","slug":"glossary-production","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/chapter\/glossary-production\/","title":{"raw":"Glossary: Production","rendered":"Glossary: Production"},"content":{"raw":"
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accounting profit<\/dt>
total revenues minus explicit costs, including depreciation<\/dd>
average profit<\/dt>
profit divided by the quantity of output produced; profit margin<\/dd>
average total cost<\/dt>
total cost divided by the quantity of output<\/dd>
average variable cost<\/dt>
variable cost divided by the quantity of output<\/dd>
constant returns to scale<\/dt>
expanding all inputs proportionately does not change the average cost of production<\/dd>
diseconomies of scale<\/dt>
the long-run average cost of producing each individual unit increases as total output increases<\/dd>
economic profit<\/dt>
total revenues minus total costs (explicit plus implicit costs)<\/dd>
explicit costs<\/dt>
out-of-pocket costs for a firm, for example, payments for wages and salaries, rent, or materials<\/dd>
firm<\/dt>
an organization that combines inputs of labor, capital, land, and raw or finished component materials to produce outputs.<\/dd>
fixed cost<\/dt>
expenditure that must be made before production starts and that does not change regardless of the level of production<\/dd>
implicit costs<\/dt>
opportunity cost of resources already owned by the firm and used in business, for example, expanding a factory onto land already owned<\/dd>
long-run average cost (LRAC) curve<\/dt>
shows the lowest possible average cost of production, allowing all the inputs to production to vary so that the firm is choosing its production technology<\/dd>
marginal cost<\/dt>
the additional cost of producing one more unit<\/dd>
private enterprise<\/dt>
the ownership of businesses by private individuals<\/dd>
production technologies<\/dt>
alternative methods of combining inputs to produce output<\/dd>
production<\/dt>
the process of combining inputs to produce outputs, ideally of a value greater than the value of the inputs<\/dd>
revenue<\/dt>
income from selling a firm\u2019s product; defined as price times quantity sold<\/dd>
short-run average cost (SRAC) curve<\/dt>
the average total cost curve in the short term; shows the total of the average fixed costs and the average variable costs<\/dd>
total cost<\/dt>
the sum of fixed and variable costs of production<\/dd>
variable cost<\/dt>
cost of production that increases with the quantity produced<\/dd><\/dl><\/div>\r\n
<\/div>","rendered":"
\n
<\/div>\n
\n
accounting profit<\/dt>\n
total revenues minus explicit costs, including depreciation<\/dd>\n
average profit<\/dt>\n
profit divided by the quantity of output produced; profit margin<\/dd>\n
average total cost<\/dt>\n
total cost divided by the quantity of output<\/dd>\n
average variable cost<\/dt>\n
variable cost divided by the quantity of output<\/dd>\n
constant returns to scale<\/dt>\n
expanding all inputs proportionately does not change the average cost of production<\/dd>\n
diseconomies of scale<\/dt>\n
the long-run average cost of producing each individual unit increases as total output increases<\/dd>\n
economic profit<\/dt>\n
total revenues minus total costs (explicit plus implicit costs)<\/dd>\n
explicit costs<\/dt>\n
out-of-pocket costs for a firm, for example, payments for wages and salaries, rent, or materials<\/dd>\n
firm<\/dt>\n
an organization that combines inputs of labor, capital, land, and raw or finished component materials to produce outputs.<\/dd>\n
fixed cost<\/dt>\n
expenditure that must be made before production starts and that does not change regardless of the level of production<\/dd>\n
implicit costs<\/dt>\n
opportunity cost of resources already owned by the firm and used in business, for example, expanding a factory onto land already owned<\/dd>\n
long-run average cost (LRAC) curve<\/dt>\n
shows the lowest possible average cost of production, allowing all the inputs to production to vary so that the firm is choosing its production technology<\/dd>\n
marginal cost<\/dt>\n
the additional cost of producing one more unit<\/dd>\n
private enterprise<\/dt>\n
the ownership of businesses by private individuals<\/dd>\n
production technologies<\/dt>\n
alternative methods of combining inputs to produce output<\/dd>\n
production<\/dt>\n
the process of combining inputs to produce outputs, ideally of a value greater than the value of the inputs<\/dd>\n
revenue<\/dt>\n
income from selling a firm\u2019s product; defined as price times quantity sold<\/dd>\n
short-run average cost (SRAC) curve<\/dt>\n
the average total cost curve in the short term; shows the total of the average fixed costs and the average variable costs<\/dd>\n
total cost<\/dt>\n
the sum of fixed and variable costs of production<\/dd>\n
variable cost<\/dt>\n
cost of production that increases with the quantity produced<\/dd>\n<\/dl>\n<\/div>\n
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