ECON 101 2Midtermreview

The market price is now below each firms minimum

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Unformatted text preview: of the firm’s variable inputs. Variable costs do change with output. Total cost equals total fixed cost plus total variable cost. That is: TC = TFC + TVC Total fixed cost is the same at each output level. Total variable cost increases as output increases. Total cost, which is the sum of TFC and TVC also increases as output increases. The total variable cost curve gets its shape from the total product curve. Notice that the TP curve becomes steeper at low output levels and then less steep at high output levels In contrast, the TVC curve becomes less steep at low output levels and steeper at high output levels. We can replace the quantity of labour on the x- axis with total variable cost. When we do that, we must change the name of the curve. It is now the TVC curve. Marginal Cost Marginal cost...
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This note was uploaded on 03/29/2014 for the course ECON 101 taught by Professor Vanderwaal during the Spring '08 term at Waterloo.

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