total revenue minus total cost, including both explicit and implicit costs total revenue minus total explicit cost the relationship between quantity of inputs used to make a good and the quantity of output of that good the increase in output that arises from an additional unit of input the property whereby the marginal product of an input declines as the quantity of the input increases costs that do not vary with the quantity of output produced costs that vary with the quantity of output produced total cost divided by the quantity of output fixed cost divided by the quantity of output variable cost divided by the quantity of output

1. economic profit

total revenue minus total cost, including both explicit and implicit costs

2. accounting profit

total revenue minus total explicit cost

3. production function

the relationship between quantity of inputs used to make a good and the quantity of output of that good

4. marginal product

the increase in output that arises from an additional unit of input

5. diminishing marginal product

the property whereby the marginal product of an input declines as the quantity of the input increases

6. fixed costs

costs that do not vary with the quantity of output produced

7. variable costs

costs that vary with the quantity of output produced

8. average total cost

total cost divided by the quantity of output

9. average fixed cost

fixed cost divided by the quantity of output

10. average variable cost

variable cost divided by the quantity of output