What Is Diminished Capacity

question 76

Essay

What is diminished capacity?

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Definitions:

Cost Curves

Graphical representations that show the cost of producing different quantities of a good or service.

Marginal Cost

The rise in cost from producing an extra unit of a good or service.

Average Total

typically pertains to the average total cost, which is calculated by dividing the total cost of production by the quantity produced.

Average Fixed

Average Fixed refers to the average fixed costs per unit of output, which decreases as the quantity of output increases because total fixed costs are spread over a larger number of units.