Economic profit is the difference between a firm’s total revenue and its

The short run

Table 5.3Table 5.3Total OutputTotal Cost  0  2  4  6  810$100$196$212$310$430$570In Table 5.3, the average fixed cost of the first unit of output is

Table 5.3Table 5.3Total OutputTotal Cost  0  2  4  6  810$100$196$212$310$430$570Refer to Table 5.3. Assuming that costs are equally distributed for the odd output integers, the marginal cost of the sixth unit is

In the short run, all resources are fixed.

Total revenue less accounting costs, less the opportunity costs of the resources used in the business but not measured in accounting costs is called “economic profit”.

A firm wishing to maximize profits will produce at the level of output where

When diminishing marginal returns occurs, the

Average total cost is the

The long run is a period of time just long enough so that at least one of the resources cannot be changed.