Average Cost (AC)
The average cost is the total cost divided by the number of units produced.
It is important to understand that firms maximize profits by considering the marginal cost, not the average cost. The difference between the average cost and the sales price does determine the profits per unit once the profit maximizing quantity is determined, but the profit maximizing quantity generally does not maximize profits per unit.
Classic Economic Models
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Balance of Payments
Endogenous Technical Change
Federal Funds (Fed Funds) Rate
Fixed Exchange Rate
Floating Exchange Rate
Gross Domestic Product (GDP)
Production Possibility Frontier
Reservation Wage Rate
Theory of the Consumer
Theory of the Firm
Velocity of Money