ajaz_eco_204_2012_2013_chapter_12_Long_Run_CMP

Eco 204 s ajaz hussain do not distribute we have

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Unformatted text preview: CO 204 Chapter 12: a Firm’s Cost Minimization Problem (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. We have endogenously determined a declining balance deprecation factor which ensures that ( ) equals the exogenously given salvage value. I like it. You should too. & Declining balance depreciation () 5. The Price of Using “Own Capital” Recall that the firm’s price of using its own capital for its production is calculated as the “user cost of capital”: () ⏟ () We have seen that (make sure you know which terms are exogenous vs. endogenous): () Purchase Price of Capital, Useful life of Capital, ( ) Salvage value Declining Balance Depreciation Declining Balance Depreciation Straight Line Depreciation Given: ( ) () Given: ( ) depreciation factor Given: ( ) () () () () ( ) { () () ( ) () ( ( ){ ) () ) () () ( } ( ) [ { () () ( ) () } () () () } ]{ } () () ( ) { () } () () () () ) () () () ( () () () () 16 ECO 204 Chapter 12:...
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