Содержание
- 2. Ch 20 Learning Objectives Why economic costs include both explicit costs and implicit costs. How the
- 3. Economic Costs Economic costs - payments a firm must make, or incomes it must provide, to
- 4. Explicit Costs Cash Payments a firm makes to those who supply labor services, materials, fuel, transportation
- 5. Implicit Costs Implicit costs - opportunity costs of using its self-owned, self-employed resources. Money payments that
- 6. T-shirts example: Accounting profits - $57,000 Ignores implicit costs Overstates economic success
- 7. Normal Profits Normal profits are considered an implicit cost because they are the minimum payments required
- 8. Economic Profits Economic or pure profits are total revenue less all costs (explicit and implicit including
- 9. Short Run Time period that is too brief for a firm to alter its plant capacity.
- 10. Long-run The long run is a period of time long enough for a firm to change
- 11. Economic Profit Versus Accounting Profits Economic Profit Accounting Costs (Explicit Costs Only) Accounting Profit Explicit Costs
- 12. Short-Run Production Relationships Total Product (TP) Marginal Product (MP) Average Product (AP)
- 13. Law of Diminishing returns Assumes technology is fixed & techniques for production do not change. As
- 14. Increasing Marginal Returns Law of Diminishing Returns 0 1 2 3 4 5 6 7 8
- 15. Law of Diminishing Returns Graphical Portrayal TP MP AP Increasing Marginal Returns Diminishing Marginal Returns Negative
- 16. Law of Diminishing Returns Example For example, a farmer will find that a certain number of
- 17. The law of diminishing returns assumes all units of variable inputs—workers in this case—are of equal
- 18. Short-Run Production Costs Fixed Costs Variable Costs Total Cost TC = TFC + TVC
- 19. Short-Run Production Relationships Short‑run production reflects the law of diminishing returns that states that as successive
- 20. Short Run Production Costs Fixed, variable and total costs 1. Total fixed costs are those costs
- 21. Short Run Production Costs Per unit or average 1. Average fixed cost is the total fixed
- 22. Short Run Production Costs Marginal cost - additional cost of producing one more unit of output
- 23. Short Run Production Costs Cost curves will shift if the resource prices change or if technology
- 24. Short-Run Production Costs Per-Unit or Average Costs Average Fixed Cost (AFC) Average Variable Cost (AVC) Average
- 25. Short-Run Production Costs Total Cost, Fixed and Variable Costs TFC TC TVC Total Cost Variable Cost
- 26. Short-Run Production Costs Average and Marginal Costs AFC MC ATC AVC AVC AFC
- 27. Short-Run Production Costs MC and Marginal Product Marginal Decisions Relation of MC to AVC and ATC
- 28. Short-Run Production Costs MP AP MC AVC Quantity of Output Quantity of Labor Production Curves Cost
- 29. Long-run In the long‑run, all production costs are variable, i.e., long-run costs reflect changes in plant
- 30. Economies of Scale a.k.a. Economies of mass production As plant size increases, a number of factors
- 31. Diseconomies of Scale Over time, thee expansion of a firm may lead to diseconomies of scale
- 32. Economies or diseconomies of scale exist in the long run. 1. Economies of scale or economies
- 33. Long-Run Production Costs Firm Size and Costs Long-Run Cost Curve Economies of Scale Labor Specialization Managerial
- 34. Long-Run Production Costs Long-Run ATC Curve Average Total Costs ATC-1 ATC-2 ATC-3 ATC-4 ATC-5 Output Any
- 35. Long-Run Production Costs Long-Run ATC Curve Long-Run ATC Average Total Costs ATC-1 ATC-2 ATC-3 ATC-4 ATC-5
- 36. Long-Run Production Costs Alternative Long-Run ATC Shapes Output Long-Run ATC Curve Where Economies Of Scale Exist
- 37. Long-Run Production Costs Alternative Long-Run ATC Shapes Output Long-Run ATC Curve Where Costs Are Lowest Only
- 38. Long-Run Production Costs Alternative Long-Run ATC Shapes Output Long-Run ATC Curve Where Economies Of Scale Exist,
- 39. Minimum Efficient Scale and Industry Structure Minimum Efficient Scale (MES) Natural Monopoly Applications and Illustrations Rising
- 40. Don’t Cry Over Sunk Costs Sunk Costs Irrelevant in Decision Making Once Incurred, They Cannot Be
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