Chapter 8 Producers 2 - Producer Decisions Chap 8 Today's...

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1 Microeconomics Principles March 19, 2008 Producer Decisions Today’s Outline Chap 8 z Economic Costs for Producers z Time permitting – start In-Class NEWS: z Homework #4 moved to 3/26 (Wed) z We will do an in class on Friday 3/21 on Chap 8 Explaining Law of Diminishing Returns Total Product Marginal Product = change in total product change in input Average Product (output per unit of labor) = total product units of input Graphical Portrayal 0 10 20 30 Total Product, TP 123456789 20 10 Marginal Product, MP TP MP AP Increasing Marginal Returns Diminishing Marginal Returns Negative Marginal Returns I II III 1) Note when MP intersects AP! 2) Note what happens to TP when MP hits zero! We’ve looked at production…. Now Costs Short Run Production Costs Pgs. 150-155 Short Run Costs Fixed Cost Costs 10 0 Q 100 200 300 400 500 600 700 800 900 1000 $1100 TFC TVC Variable Cost
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2 Total Cost, Fixed and Variable Costs Costs 123456789 10 0 Q 100 200 300 400 500 600 700 800 900 1000 $1100 TFC TC TVC Total Cost Variable Cost Fixed Cost What is reflected in TVC and therefore TC??
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This note was uploaded on 04/18/2008 for the course PHY 121 taught by Professor Smith during the Spring '08 term at University of Maine Orono .

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Chapter 8 Producers 2 - Producer Decisions Chap 8 Today's...

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