9 - Cost Curves

42 063 58 10 25 35 017 043 060 66 10 30 40 015 045

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Unformatted text preview: 0 40 0.15 0.45 0.61 72 10 35 45 0.14 0.49 0.63 76 10 40 50 0.13 0.53 0.66 The Costs of Producing Widgets (TC) Total Cost as a function of Quantity 60 50 $ 40 30 20 10 0 0 20 40 Q 60 80 Short-Run Cost Marginal Cost Marginal cost (MC): the increase in total cost that results from a one-unit increase in total product. Average fixed cost (AFC): total fixed cost per unit of output. Average variable cost (AVC): total variable cost per unit of output. Average total cost (ATC): total cost per unit of output. ATC(Q) = AFC(Q) + AVC(Q) The Costs of Producing Widgets (Table) Q 0 MPP 10 10 22 dTC MC AFC AVC ATC 5 0.50 1.00 0.50 1.50 12 5 0.42 0.45 0.45 0.91 36 14 5 0.36 0.28 0.42 0.69 48 12 5 0.42 0.21 0.42 0.63 58 10 5 0.50 0.17 0.43 0.60 66 8 5 0.63 0.15 0.45 0.61 72 6 5 0.83 0.14 0.49 0.63 76 4 5 1.25 0.13 0.53 0.66 0 The Costs of Producing Widgets (AC &MC) Widget Cost Functions 1.60 1.40 1.20 MC $ 1.00 AVC 0.80 AFC 0.60 ATC 0.40 0.20 0.00 0 20 40 Q 60 80 Short-Run Cost Shifts in Cost Curves The firm s cost curves depends on: !  Technology !  Input prices Case 10.2: Webvan Why did Webvan fail?...
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This note was uploaded on 02/22/2013 for the course ECON 001 taught by Professor Stein during the Spring '07 term at UPenn.

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