E303lect33F09

E303lect33F09 - Reading Ch 5 pp 177-185 Problem Set#11 Due Monday Test#2 WEDNESDAY Comments 1 On HW#11 Where I draw a LRAC it is supposed to hit a

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Reading: Ch. 5, pp. 177-185 Problem Set #11. Due Monday Test #2 WEDNESDAY Comments: 1) On HW#11 – Where I draw a LRAC, it is supposed to hit a flat place, then run parallel to the horizontal axis, and then turn up. 2) On HW#10 – Several students complained about my grading of the following Q TFC TVC TC MC AFC AVC ATC 0 10 0 10 1 10 6 16 6 10 6 16 2 10 10 20 4 5 5 10 3 10 12 22 2 3.333333 4 7.333333 4 10 16 26 4 2.5 4 6.5 5 10 23 33 7 2 4.6 6.6 6 10 35 45 12 1.666667 5.833333 7.5 7 10 53 63 18 1.428571 7.571429 9 8 10 78 88 25 1.25 9.75 11 Some students argue that, say at a price of $10, the breakeven point is 2 units because at that point TR=20 and TC=20. This is incorrect because it is NOT AN OPTIMUM. The breakeven price is the minimum point on the ATC curve, $6.50. (I have cleaned up the presentation in lecture 30, which you can copy off from blackboard). Lecture 33 REVIEW___________________________________________________: c. Algebraic Forms of the Cost Function. 1. Solving Algebraic specifications 2. Production and pricing decisions. 3. Long Run Costs a. Long run average costs b. Economies of Scale, Diseconomies of Scale PREVIEW ____________________________________________________ c. Survivability d. Measuring returns to scale 4. Multiple Output Cost Functions Lecture__________________________________________________________ c. Survivability: The shape of the LRAC can determine how many firms can survive in an industry. 1
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This note was uploaded on 04/12/2010 for the course ECON 303 taught by Professor Shrestha during the Fall '08 term at VCU.

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E303lect33F09 - Reading Ch 5 pp 177-185 Problem Set#11 Due Monday Test#2 WEDNESDAY Comments 1 On HW#11 Where I draw a LRAC it is supposed to hit a

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