average fixed cost (AFC)  fixed costs divided by the quantity produced.
average product of labor  the quantity produced divided by the amount of labor input.
average total cost (ATC)  total costs of production divided by the quantity produced (also called cost per unit).
average variable cost (AVC)  variable costs divided by the quantity produced.
breakeven point  the point at which price equals the minimum of average total cost.
constant returns to scale  a situation in which long-run average total cost is constant as the output of a firm changes.
diseconomies of scale  also called decreasing returns to scale; a situation where long-run average total cost increases as the output of a firm increases.
economies of scale  also called increasing returns to scale; a situation in which long-run average total cost declines as the output of a firm increases.
fixed costs  costs of production that do not depend on the quantity of production.
long run  the minimum period of time during which all inputs to production can be changed.
long-run average total cost curve  the curve that traces out the short-run average total cost curves, showing the lowest average total cost for each quantity produced as the firm expands in the long run.
marginal cost  the change in total costs due to a one-unit change in quantity produced.
minimum efficient scale  the smallest scale of production for which long-run average total cost is at a minimum.
production function  a relationship that shows the quantity of output for any given amount of input.
short run  the period of time during which it is not possible to change all inputs to production; only some inputs, such as labor, can be changed.
shutdown point  the point at which price equals the minimum of average variable cost.
total costs  the sum of variable costs and fixed costs.
variable costs  costs of production that vary with the quantity of production.