NCERT Class 12 Economics Glossary

Average cost Total cost per unit of output.

Average fixed cost Total fixed cost per unit of output.

Average product Output per unit of the variable input.

Average revenue Total revenue per unit of output.

Average variable cost Total variable cost per unit of output.

Break-even point is the point on the supply curve at which a firm earns normal profit.

Budget line consists of all bundles which cost exactly equal to the consumer’s income.

Budget set is the collection of all bundles that the consumer can buy with her income at the prevailing market prices.

Constant returns to scale is a property of production function that holds when a proportional increase in all inputs results in an increase in output by the same proportion.

Cost function For every level of output, it shows the minimum cost for the firm.

Decreasing returns to scale is a property of production function that holds when a proportional increase in all inputs results in an increase in output by less than the proportion.

Demand curve is a graphical representation of the demand function. It gives the quantity demanded by the consumer at each price.

Demand function A consumer’s demand function for a good gives the amount of the good that the consumer chooses at different levels of its price when the other things remain unchanged.

Duopoly is a market with just two firms.

Equilibrium is a situation where the plans of all consumers and firms in the market match.

Excess demand If at a price market, demand exceeds market supply, it is said that excess demand exists in the market at that price.

Excess supply If at a price market, supply is greater than market demand, it is said that there is excess supply in the market at that price.

Firm’s supply curve shows the levels of output that a profitmaximising firm will choose to produce at different values of the market price.

Fixed input An input which cannot be varied in the short run is called a fixed input.

Please refer to attached file for NCERT Class 12 Economics Glossary