Microsoft PowerPoint - lecture 10 - firm and costs

Microsoft PowerPoint - lecture 10 - firm and costs - 2...

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1 Firm and Costs The Short Run and the Long Run Short run The period of time during which at least one of the firm’s inputs is fixed. Long run A period of time long enough to allow a firm to vary all of its inputs, to adopt new technology, and to increase or decrease the size of its physical plant. LEARNING OBJECTIVE 2 The Short Run and the Long Run Total cost The cost of all the inputs a firm uses in production. Variable costs Costs that change as output changes. Fixed costs Costs that remain constant as output changes. Total Cost = Fixed Cost + Variable Cost TC = FC + VC Fixed Costs in the Publishing Industry 10 - 2 $437,500 $75,000 $20,000 $6,000 $4,000 $8,000 $4,000 $5,000 $559,500 Salaries and Benefits Rent Utilities Supplies Postage Travel Subscriptions, etc. Miscellaneous Total AMOUNT COST •The salaries of editors are considered a fixed cost by publishers. The Short Run and the Long
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Microsoft PowerPoint - lecture 10 - firm and costs - 2...

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