Lec13 - 1 Output Quantity Produced Labor Input (hrs)...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 1 Output Quantity Produced Labor Input (hrs) Variable Costs at ($20/hr) Fixed Costs ($) Total Costs ($) 200 200 2 8 160 200 360 4 12 240 200 440 6 14 280 200 480 8 17 340 200 540 10 22 440 200 640 12 30 600 200 800 14 42 840 200 1040 16 58 1160 200 1360 18 78 1560 200 1760 20 102 2040 200 2240 Costs Costs u Costs determined by u technology u cost of inputs 500 1000 1500 2000 2 4 6 8 10 12 14 16 18 20 C o s t s ( $ ) Average Costs Average Costs Output Quantity Variable Costs ($) Total Costs ($) Average Variable Costs ($) Average Total Costs ($) Marginal Costs ($) 200-- 2 160 360 80.0 180.0 4 240 440 60.0 110.0 6 280 480 46.7 80.0 8 340 540 42.5 67.5 10 440 640 44.0 64.0 12 600 800 50.0 66.7 14 840 1040 60.0 74.3 16 1160 1360 72.5 85.0 18 1560 1760 86.7 97.8 20 2040 2240 102.0 112.0 80 40 20 30 50 80 120 160 200 240 TC Q VC Q Average Costs Average Costs 50 100 150 200 250 2 4 6 8 10 12 14 16 18 20 Output Quantity C o s t s ( $ ) AVC u costs originate in production technology u AVC = VC/Q = wL/Q u AP L = Q/L u AVC increases with Q when AP L is falling u falls initially and then rises quickly as capacity reached u AVC shifts with u change in AP L u change in cost variable input ; VC = AVC • Q Q=4 VC = 60 • 4 = 240 2 50 100 150 200 250 2 4 6 8 10 12 14 16 18 20 Output Quantity C o s t s ( $ ) AVC ATC Average Costs Average Costs u ATC = AVC + AFC; ATC = TC/Q u AFC = FC/Q u AFC fall steadily as output increases u AVC fall initially and then rises quickly as capacity reached...
View Full Document

This note was uploaded on 10/10/2009 for the course ECON 101 taught by Professor Gerson during the Winter '08 term at University of Michigan.

Page1 / 6

Lec13 - 1 Output Quantity Produced Labor Input (hrs)...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online