| Average cost | the sum of average fixed cost and average variable cost at each quantity of output
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| Average fixed cost | the fixed cost per unit of output
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| Average product | the quantity of output produced per worker
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| Average variable cost | the variable cost per unit of output
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| Business | an enterprise that brings individuals, financial resources, and economic resources together to produce a good or service for economic gain
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| Capital-intensive process | a production process that employs more capital and less labour
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| Constant returns to scale | a situation in which a percentage increase in all inputs results in an equal percentage increase in output
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| Corporation | a company that has a legal status independent of its owners
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| Decreasing returns to scale | a situation in which a percentage increase in all inputs causes a smaller percentage increase in output
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| Economic costs | a business's total explicit and implicit costs
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| Economic profit | the excess of a business's total revenue over its economic costs
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| Explicit costs | payments made by a business to businesses or people outside of it
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| Fixed costs | economic costs for inputs that remain fixed at all quantities of output
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| Fixed inputs | inputs whose quantities cannot be adjusted in the short run
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| Implicit costs | the owner's opportunity costs of being involved with a business
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| Increasing returns to scale | a situation in which a percentage increase in all inputs causes a larger percentage increase in output
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| Inputs | the resources used in production
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| Labour-intensive process | a production process that employs more labour and less capital
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| Law of diminishing marginal returns | at some point, as more units of a variable input are added to a fixed input, the marginal product will start to decrease
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| Long-run average cost | the minimum short-run average cost at each possible level of output
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| Marginal cost | the extra cost of producing an additional unit of output
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| Marginal product | the extra output produced by an additional worker
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| Normal profit | the minimum return necessary for owners to keep funds and their entrepreneurial skills in their business
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| Output | the quantity of a good or service that results from production
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| Partnership | an unincorporated business that is owned by two or more people
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| Production | the process of transforming a set of resources into a good or service that has economic value
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| Productive efficiency | making a given quantity of output at the lowest cost
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| Sole proprietorship | an unincorporated business that is owned by a single person
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| Total cost | the sum of all fixed and variable costs at each quantity of output
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| Total product | the overall quantity of output produced with a given workforce
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| Variable costs | economic costs for inputs that vary at each quantity of output
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| Variable inputs | inputs whose quantities can be adjusted in the short run
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2002 McGraw-Hill Higher Education