Curves of limit costs (MS) and average variable costs (AVC), represent a specular reflection of curves of the limit productivity (MR) and average productivity (ARE) respectively. Therefore, when MR grows MS are minimum and when MR decreases, MS grow. The similar interrelation exists between ARE and AVC.
Expenses, costs, prime cost – the major economic categories. Their level generally determines the size of profit and profitability, is the cornerstone of system of indicators of production efficiency.
By consideration of costs of production are used the short-term and long-term period. The short-term period – time period too short that the enterprise could change the capacities, but rather long for change of degree of intensity of use of these fixed capacities. The long-term period – time period rather long to change quantities of all busy resources, including also capacities.