1. CHALLENGE Match the Key phrases (A-J) with their Definitions (1-10)
Marginal cost B
Average fixed cost C
Average revenue D
Long run E
Producer surplus F
Short run G
Total Cost H
Economies of scale I
Abnormal profit J
Returns to scale 1
The change in total costs from increasing output by one extra unit 2
In the long run, all factors of production are variable. 3
Profit in excess of normal profit 4
TFC/Q 5
The difference between what producers are willing and able to supply a good and the price they receive 6
Falling long run average cost as output increases 7
TFC + TVC 8
A time period where at least one factor of production is in fixed supply 9
TR/Q 10
A period of time when all factors of production are variable
CHALLENGE
Match the
Key phrases (A-J)
with their
Definitions (1-10)
Costs and Revenues

2. CHALLENGE A B C D E F G H I J Marginal cost
The change in total costs from increasing output by one extra unit 1 B
Average fixed cost
TFC/Q 4 C
Average revenue
TR/Q 9 D
Long run
A period of time when all factors of production are variable 10 E
Producer surplus
The difference between what producers are willing and able to supply a good and the price they receive 5 F
Short run
A time period where at least one factor of production is in fixed supply 8 G
Total Cost
TFC + TVC 7 H
Economies of scale
Falling long run average cost as output increases 6 I
Abnormal profit
Profit in excess of normal profit 3 J
Returns to scale
In the long run, all factors of production are variable. 2