{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

econ101paper - J ason F rankel Economics 101 Paper Topic 2...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Jason Frankel Economics 101 Paper Topic 2 A firm is maximizing profits in a perfectly competitive industry. From this one firm’s standpoint, the marginal cost of producing their last product, will equal the market price. How much they can produce until marginal cost equals the market price determines the current quantity supplied by the firm. Prices of variable inputs decreases. An example might be that labor costs falling. From this, there are changes to how much the firm produces at the given price level. To start, marginal cost will decrease. Marginal cost is the change in total cost in relationship to the change in total product. In this instance, total product is not changing, but total costs are falling. We can produce the same amount with less cost, and therefore, marginal cost is decreasing. Average cost is going to change, for essentially the same reason. Average cost is the total cost divided by the total product. If total costs are
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
This is the end of the preview. Sign up to access the rest of the 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