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ch5s2
vocab
Term | Definition |
---|---|
marginal product | the change in total product that results from hiring one more worker |
specialization | having each worker focus on a particular facet of production |
increasing returns | each new worker adds more to total output than the last |
diminishing returns | each new worker causes total output to grow but at a decreasing rate |
fixed cost | cost that does not change no matter how much is produced |
variable cost | cost that rises or falls depending on the quantity produced |
total cost | fixed + variable costs |
marginal cost | additional cost of producing one more unit |
marginal revenue | the additional income from selling one more unit of a good |
total revenue | is the income a business receives from selling a product |
profit-maximizing output | reached level of production where it realizes the greatest amount of profit |