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13 cards from this deck
Cost to produce a single item/unit of output
Total Costs ÷ Output
Fixed Costs + Variable Costs
Expenses that don't change with output (e.g., rent)
Expenses that change with production (e.g., raw materials)
Increasing production leads to lower average unit costs
Fixed costs spread across more units
When business grows too large, average unit costs rise
Indicates business becoming more efficient
Indicates business becoming less efficient
Where average unit costs are at their minimum
Low costs ≠ automatic profit; price must exceed costs
Can offer lower prices or higher profit margins
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