{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

3-11-09 - • FC will be the part of the TC function that...

Info icon This preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Microeconomics – Class Notes – 3/11/09
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
T-Method Use the t-method to determine the “returns to scale”
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Logarithmic – section 6.2 Elasticity section DON’T HAVE TO KNOW THIS FOR QUIZ
Image of page 4
END OF CHAPTER #6 MATERIAL
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
CHAPTER #7
Image of page 6
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
IN-CLASS WORKSHEET Q TC AC AVC MC 0 450 - - 100 5 875 175 85 75 10 1250 125 80 80 (73.75) 15 1725 115 85 115 20 2450 1225 100 180 AC and MC are the same when the minimum of the AC curve is reached, thus it seems as though an output of 15 units is the minimum (AC = MC at the minimum of Q=15) o When AC=MC Average Cost minimum AVC = MC (the minimum of the average variable cost ) You can tell the difference between VC and FC by: VC will be the part of the TC function that varies (like Q^2)
Image of page 8
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: • FC will be the part of the TC function that does NOT vary (a constant, like 9) • The marginal cost is always above the AVC, so the AVC is always rising So, to determine what the shape of the AC looks like (AC = Q + (9/Q)) • Set AC=MC • [(Q^2 + 9) / Q ] = (2*Q)*Q o Q^2 + 9 = 2Q^2 o 9 = Q^2 o Q = 3 AC will always be above AVC in this case FOR QUIZ OR EXAM: • Tell him what’s wrong with this picture (2 things) ATC (AC) is below the AVC (negative FC for some range and positive FC for another range) The MC MUST intersect the AC at the minimum. READ CHAPTER #7...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    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.

    Student Picture

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

  • Left Quote Icon

    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.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    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.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern