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Unformatted text preview: Marginal cost, average cost and relation between them Economies of scale, diseconomies of scale Output elasticity of total cost and economies of scale Ch 9: Perfectly competitive market. Profit maximizing output is selected according to P = MC = MR where price is taken from the market by the firm. Shut down price. Short run supply curve of a firm (two situation s – when nonsunk fixed cost is zero and when it is not zero), Short run supply curve of the market, Determination of price and quantity in the short run Long run supply curve Determination of equilibrium price and quantity in the long run. Producer surplus Ch 10: Effect of excise duty and subsidy on societal welfare...
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- Spring '08
- producer, shut down, marginal return, cost minimizing problem, Diminishing total return, minimizing problem Effect