Lec05 - Managerial 2071 Lecture 05: 01/24T 1. Today' plan s...

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Managerial 2071 ©Haijin Lin 1 Managerial 2071 Lecture 05: 01/24T 1. Today ’ s plan (1) Complete Monopolist Ralph (from Lecture 04) (2) 2-13 (3) Ralph ’ s Big Firm 2. Key points (1) All firms are multiproduct enterprises - To define an economic goods: when, where and what - So, 883 Sportster produced this week is economically different from 883 Sportster produced next week - Synergy is rampant (2) The theory of firm appears to be naturally extended to multiproduct firm (3) But in general, the firm ’ s cost curve is not separable (4) Thus, AC is undefined (5) MC is the only meaningful cost statistics that remains 3. Cost in a multiproduct firm: 2-13 (1) run through part (a) - C 1 (q 1 , q 2 ) = 10q 1 + 5q 2 q 1 100 60 40 30 q 2 50 10 70 Total cost 1250 850 650 350 550 Average cost, q 1 Average cost, q 2 5 5 5 5 5 5 Incremental cost, q 1 Incremental cost, q 2 5 5 5 5 5 5 - What about MC(q 1 ) and MC(q 2 )?
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Managerial 2071 ©Haijin Lin 2 - C 2 (q 1 , q 2 ) = 6q 1 + q 1 2 + 8q 2 + q 2 2 q 1 100 60 40 30 q 2 50 10 70 Total cost 13500 6860 4740 1260 3980 6540 Average cost, q 1 106 66 46 36 Average cost, q 2 58 18 78 Incremental
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This note was uploaded on 06/05/2011 for the course ACG 2071 taught by Professor Sumbiznatch during the Spring '06 term at University of Florida.

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Lec05 - Managerial 2071 Lecture 05: 01/24T 1. Today' plan s...

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