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When a Resource Has a Perfectly Elastic Supply Curve

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When a resource has a perfectly elastic supply curve


Definitions:

Total Fixed Costs

The total of all expenses that stay the same no matter the amount of production or output.

Average Total Costs

The total cost of production (fixed and variable costs combined) divided by the number of units produced; it shows the cost per unit of output.

Variable Costs

Costs that change in proportion to the level of output in the production process.

Total Fixed Cost

The sum of all costs that remain constant regardless of the level of production or output in the short run.

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