Supply Side-EconomicsAccountingCosts

Supply Side-EconomicsAccountingCosts - Supply Side-Costs...

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Unformatted text preview: Supply Side-Costs vs. Economic nd Economic) II. Accounting (Accounting a Profits !"##$%%&'()*(+#,-&.*) $%%&'()*(+#,-&.*)#/#0&)12#3454('4#6#7892*%*)#:&;); 7892*%*)#%&;);#/#7892*%*)#91<=4();#.&-#*(9');#';4>#*(#)?4#9-&>'%)*&(#9-&%4;;" @"##7%&(&=*%#,-&.*) 7%&(&=*%#,-&.*)#/#0&)12#3454('4#6#7%&(&=*%#:&;); 7%&(&=*%#%&;);#/#$22#%&;);#&.#9-&>'%)*&(#A&-#512'4#&.#122#-4;&'-%4;#';4>#*(##### ######################################9-&>'%)*&(B#C?4)?4-#&-#(&)#)?4-4#*;#1(#4892*%*) 91<=4()D# ###/#7892*%*)#:&;);#E#F=92*%*)#:&;); 7892*%*)#%&;);#/#7892*%*)#91<=4();#.&-#*(9');#';4>#*(#)?4#9-&>'%)*&(###### ##########################################9-&%4;;" F=92*%*)#%&;);#/#G12'4#&.#-4;&'-%4;#';4>#*(#)?4#9-&>'%)*&(#9-&%4;;#.&-## ################C?*%?#)?4-4#1-4#(&#4892*%*)#91<=4();# ##781=924;#&.#F=92*%*)#:&;);H !"##G12'4#&.#)*=4#&.#&C(4-#&94-1)&-#C?&#>&4;#(&)#91<#?*=;42.I?4-;42.#;121-< @"##G12'4#&.#%19*)12#';4>#*(#9-&>'%)*&(#9-&%4;;#.&-#C?*%?#)?4-4#1-4#(&######## 4892*%*)#91<=4();" $"##J'22<#&C(4>#1(>#>49-4%*1)4>#1;;4);#A;'%?#1;#1#K'*2>*(+D L"##J*(1(%*12#%19*)12#*(54;)4>#*(#1#K';*(4;;" M"##7%&(&=*%#,-&.*)#/#0&)12#3454('4#6#7892*%*)#:&;);#6#F=92*%*)#:&;); ####### N"##7%&(&=*%#,-&.*)#*;#)?4#.*+'-4#C?*%?#*;#-42451()#.&-#4%&(&=*%#>4%*;*&(6=1O*(+" !"##$%&'()*+#,-((./*#01&0#&#2*3*40#567#8/#3.4/89*284:##(-231&/84:#& /'&))#;82'"##<1*#3./0#.;#(-231&/84:#01*#;82'#8/#=>??@???"##<1*#4*%0#A*/0 &)0*24&08B*#-/*#.;#01*#=>??@???#8/#0.#84B*/0#80#84#A.49/#C1831#C.-)9#D8*)9 &#2&0*#.;#2*0-24#.;#E?F"##<1*#567#3.-)9#*&24#=G?@???#C.2H84:#;.2 /.'*.4*#*)/*" 733.-4084:#,0&0*'*40+ <.0&)#I*B*4-*#JK ,&)*/L 733.-4084:#N./0/ P&A.2#$%(*4/*/#Q I&C#5&0*28&)/#Q ,-(()8*/ 79B*208/84:# R*(2*38&08.4 S08)808*/ U2.(*20D#<&%*/ 733.-4084:#U2.;80 =G?@??? =M?@??? =O?@??? !@??? E?@??? T@??? >@??? =T?@??? 7 What happens if the price of an input changes? (Say the price of labor falls.) Application: Allocation of Production among Multiple Plants Yet another approach. Maximize output for each level expenditures. !!!!!"#$%$&'#!()*$+',-!.,/,0&0%, 1$,/2!3040%50!67 ./2089 Rearrange Equation (1) as: >##$5%,'%?!@$8,8 6"AB2'#',9 (3) :;<=<<< :C<=<<< D/E$*!"AB0%808!F 3/G!H/,0*'/28!F .5BB2'08 L0B*0#'/,'$% N,'2','08 )*$B0*,P!1/A08 :I<=<<< or, maximum output, given expenditures, is obtained when the marginal product of an input >J40*,'8'%?! K=<<< per dollar spent on the input is the same. M<=<<< O=<<< Q=<<< :C<=<<< :Q<U<<< I<=<<< X:O<=<<< R&B2'#',!@$8,8 SBB$*,5%',P!@$8,!$+! R%408,0J!T5%J8 V/250!$+!H/%/?0*W8 1'&0 "#$%$&'#!)*$+', R+!,Y0!HZ>!580J!Y0*!+5%J8!0280GY0*0!8Y0!G$52J!Y/40!'%#$&0!$+ :O<=<<<!Y'?Y0*!,Y/%!'+!8Y0!E$5?Y,!/%J!$B0*/,0J!,Y'8!E58'%088U © Bryan L. Boulier, 2011. All rights reserved. III. Production and Costs in the Short-Run: ...
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This note was uploaded on 03/16/2011 for the course ECON 101 taught by Professor Fon during the Spring '06 term at GWU.

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