Wk6_Section_07

# Wk6_Section_07 - Week 6 Section Notes EWMBA201A Rob Seamans...

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September 16, 2007 Week 6 Section Notes 1 Week 6 Section Notes EWMBA201A Rob Seamans

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September 16, 2007 Week 6 Section Notes 2 Administrative Stuff 1. Recap of evaluations 2. Sunk costs and the mid-term exam 3. Read and prepare Colonial Homes case for next class
September 16, 2007 Week 6 Section Notes 3 Recap of Costs Sunk Costs “Don’t worry about things you cannot change” Opportunity Costs “Always know what ALL your options are” Over the relevant time horizon… Total Costs: C(q) Fixed Costs: Not dependant on quantity produced: C(0) Variable Costs: C(q)-C(0) Marginal Costs: Cost of increasing q by a small amount: dC(q)/dq Average Total Costs: C(q)/q Average Variable Costs: vC(q)/q

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September 16, 2007 Week 6 Section Notes 4 Thought Exercise What’s the difference between average cost and marginal cost? Between average variable cost and marginal cost?
September 16, 2007 Week 6 Section Notes 5 Thought Exercise What’s the difference between average cost and marginal

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## This note was uploaded on 09/15/2009 for the course EWMBA 201A taught by Professor Wolfram during the Fall '07 term at Berkeley.

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Wk6_Section_07 - Week 6 Section Notes EWMBA201A Rob Seamans...

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