Lecture B (WK4)

Lecture B (WK4) - Lecture B (WK4) Welcome Back! We will...

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

View Full Document Right Arrow Icon
Lecture B (WK4) Welcome Back! We will begin investigating short run costs and output decisions by examining the characteristics of a purely competitive market . Included is an introduction to the concept of the perfectly elastic demand curve facing an individual firm in a purely competitive industry. The total-revenue—total-cost approach is analyzed followed by the MR = MC rule. Chapter 8 – Short-Run Costs and Output Decisions Our view in this section is on costs in the short run only. Recall that the short run  is that period during which two conditions hold: 1) Existing firms face limits imposed by some fixed factor of production, and 2) new firms cannot enter, and exiting firms cannot exit, an industry. In the short run all firms have costs that they must bear regardless of their output: fixed cost : any cost that does not depend on the firm's level of output. These costs are incurred even if the firm is ont producing. There are no fixed costs in the long run. variable cost : a cost that depends on the level of production output chosen. total cost
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/15/2010 for the course EC 142DLB taught by Professor Graceonodipe during the Spring '10 term at Park.

Page1 / 3

Lecture B (WK4) - Lecture B (WK4) Welcome Back! We will...

This preview shows document pages 1 - 2. Sign up to view the full document.

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