Cost Part 2.pptx

# Cost Part 2.pptx - Cost and Profit 1 Cost in the Short Run...

• 9

This preview shows page 1 - 9 out of 9 pages.

1 Cost and Profit

Subscribe to view the full document.

2 Cost in the Short Run Fixed costs do not change with changes in output Variable costs increase as output increases. Total cost of production equals the fixed cost plus the variable cost VC FC TC
3 Cost in the Short Run Average Total Cost (ATC) is the cost per unit of output, or average fixed cost (AFC) plus average variable cost (AVC). This can be written: Q TVC Q TFC ATC Q TC or AVC AFC ATC

Subscribe to view the full document.

4 Cost in the Short Run Marginal Cost ( MC ) is the cost of expanding output by one unit. Since fixed cost have no impact on marginal cost, it can be written as: Q TC MC
5 The Various Measures of Cost: 1.10 2.10 1.50 1.20 0.30 12.00 3.00 15.00 10 1.90 1.43 1.10 0.33 9.90 3.00 12.90 9 1.70 1.38 1.00 0.38 8.00 3.00 11.00 8 1.50 1.33 0.90 0.43 6.30 3.00 9.30 7 1.30 1.30 0.80 0.50 4.80 3.00 7.80 6 1.30 0.70 0.60 3.50 3.00 6.50 5 0.90 1.35 0.60 0.75 2.40 3.00 5.40 4 0.70 1.50 0.50 1.00 1.50 3.00 4.50 3 0.50 1.90 0.40 1.50 0.80 3.00 3.80 2 0.30 3.30 0.30 3.00 0.30 3.00 3.30 1 --------- --------- --------- 0.00 3.00 3.00 0 Marginal Cost Average Total Cost Average Variable Cost Average Fixed Cost Variable Cost

Subscribe to view the full document.

Subscribe to view the full document.

{[ snackBarMessage ]}

###### "Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern