Robert H. Frank,
Cornell University
Ian C. Parker,
University of Toronto
| Average fixed cost (AFC) | Fixed cost divided by the quantity of output.
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| Average total cost (ATC) | Total cost divided by the quantity of output.
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| Average variable cost (AVC) | Variable cost divided by the quantity of output.
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| Fixed cost (FC) | Cost that does not vary with the level of output in the short run.
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| Marginal cost (MC) | Change in total cost that results from a 1-unit change in output.
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| Natural monopoly | A market that can be served at lowest cost by a single supplier.
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| Output expansion path | The locus of tangencies (minimum-cost input combinations) traced out by an isocost line of given slope as it shifts outward into the isoquant map for a production process.
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| Total cost (TC) | All costs of production: the sum of variable cost and fixed cost.
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| Variable cost (VC) | Cost that varies with the level of output in the short run.
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2002 McGraw-Hill Higher Education