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FIXED COST: In general, cost that does not change with changes in the quantity of output produced. More specifically, fixed cost is combined with the adjectives "total" and "average" to indicate the overall level of fixed cost or the per unit fixed cost. Fixed cost is incurred whether of not any output is produced. The same fixed cost is incurred at any and all output levels. This means that total fixed cost is, in fact, FIXED. However, it also means that average fixed cost, or fixed cost per unit, declines as the output level increases. Spreading out $100 over 1,000 units gives a lower per unit fixed cost that spreading out $100 over 10 units.
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PERFECT COMPETITION, SHORT-RUN SUPPLY CURVE A perfectly competitive firm's supply curve is that portion of its marginal cost curve that lies above the minimum of the average variable cost curve. A perfectly competitive firm maximizes profit by producing the quantity of output that equates price and marginal cost. As such, the firm moves along its positively-sloped marginal cost curve in response to changing prices.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time browsing about a thrift store wanting to buy either a remote controlled sports car with an air spoiler or semi-gloss photo paper that works with your neighbor's printer. Be on the lookout for attractive cable television service repair people.
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This isn't me! What am I?
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Cyrus McCormick not only invented the reaper for harvesting grain, he also invented the installment payment for selling his reaper.
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"The moment you let avoiding failure become your motivator, you're down the path of inactivity. " -- Roberto Goizueta, Coca-Cola CEO
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CABEI
Central American Bank for Economic Integration
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