Costs

Sunk costs are expenditures already made and cannot be recovered, irrespective of future choices. These costs are essentially "sunk" because they …

In the short run, a firm's costs are divided into fixed and variable. Fixed costs are expenses that do not fluctuate with the level of output. These …

In the short run, a firm incurs various fixed expenses such as lease payments, insurance premiums, and machinery depreciation. Collectively, these are …

Average Fixed Cost (AFC) is the total fixed cost per unit of output. It's calculated by dividing the total fixed costs (TFC) by the quantity of output …

The Average Fixed Cost, or AFC curve, is the graphical representation of the average fixed cost. It starts at the first unit of output. As the level of …

Marginal cost is the additional cost incurred by a firm when it produces one more unit of a good or service. It's derived from the change in total …

The marginal cost (MC) curve typically exhibits a U-shaped pattern, reflecting the relationship between marginal cost and production level. Initially, as …

Marginal Cost (MC) is a variable cost that refers to the additional expenses incurred by the firm when producing one more unit of a good or service. The …

In the short run, costs can be classified into fixed or variable categories. Variable costs fluctuate with the level of production or service activity, …

In the short run, firms cannot adjust the quantity of certain factors of production, like capital and technology. However, firms can change the quantity …

In economics, the short-run marginal cost (SRMC) and long-run marginal cost (LRMC) curves depict how the cost of producing additional units of output …

A firm may experience economies of scale in the long run. This occurs when a firm's output increases, but its total costs increase at a slower rate. …

Diseconomies of scale occur in the long run when the costs per unit increase with each additional unit of output. For example, the firm may double its …

Economies of scope refer to a firm's cost advantages by producing a wider variety of products rather than focusing on a single product. Economies of …