capital

firm an organization that combines inputs of labor, capital, land, and raw or finished component materials to

produce outputs.

fixed cost cost of the fixed inputs; expenditure that a firm must make before production starts and that does

not change regardless of the production level

fixed inputs factors of production that can’t be easily increased or decreased in a short period of time

implicit costs opportunity cost of resources already owned by the firm and used in business, for example,

expanding a factory onto land already owned

long run period of time during which all of a firm’s inputs are variable

long-run average cost (LRAC) curve 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

marginal cost the additional cost of producing one more unit; mathematically,

marginal product change in a firm’s output when it employees more labor; mathematically,
{"file_name": "Microeconomics3e.pdf", "title": "Principles of Microeconomics 3e", "batch_upload": true, "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_type": ".pdf", "producer": "Prince 14.2 (www.princexml.com)", "upload_timestamp": "2026-02-07T15:24:38.309401", "file_size_mb": 26.99, "creationdate": "2022-12-07T14:15:44-06:00", "moddate": "2022-12-07T14:23:05-06:00", "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "uploaded_via": "batch_uploader", "creator": "PDFMiner", "total_pages": 597}