Short Run Costs
Chapter 8: and
Output
-
-
Decisions
To calculate costs, must
firm know -
*
a
-Quantity of outputneeded
Graphs
Not calculations but
how to understand it
-How much those inputs cost
*
T58-
1) Fixed lost 8--Doesn't depend on firm'soutput.
-cost remain same
ifthe firm produce nothing.
No Fixed cost in
Long Run
-
2) variable costo-- Depends on level
ofproduction
3) Total cost : -
TEC + TVL
4) Average Fixed Cost -- TFC divided by number of units of output
Spreading
-
As
output increases, AFC declines as we are
Overhead dividing a fixed no by a
larger quantity
100 TFC 100
AF2=
⑧
E
&
.
. AFC
outputunits Outputunits
Chapter 8: and
Output
-
-
Decisions
To calculate costs, must
firm know -
*
a
-Quantity of outputneeded
Graphs
Not calculations but
how to understand it
-How much those inputs cost
*
T58-
1) Fixed lost 8--Doesn't depend on firm'soutput.
-cost remain same
ifthe firm produce nothing.
No Fixed cost in
Long Run
-
2) variable costo-- Depends on level
ofproduction
3) Total cost : -
TEC + TVL
4) Average Fixed Cost -- TFC divided by number of units of output
Spreading
-
As
output increases, AFC declines as we are
Overhead dividing a fixed no by a
larger quantity
100 TFC 100
AF2=
⑧
E
&
.
. AFC
outputunits Outputunits
