# What level of output will minimize the average cost

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a.What level of output will minimize the average cost? What is the AC at this point?b.Does the production process indicate diminishing returns? How can you tell?
Producing a Given Output at Minimum Cost
The Isocost LineIsocost line: Graph showing all possible combinations of labor and capital that can be purchased for a given total cost.
Mathematical Treatment  Long-Run Cost with Economies and Diseconomies of Scale
Profit Maximization and Competitive Supply Costs of production depends on output Total Cost (C) = C.q Profit for the firm, π, is the difference between revenue and costs
Profit Maximization in the Short Run
A Competitive Firm
A Competitive Firm’s Short-Run Supply Curve
Long-Run Profit Maximization
ExerciseSuppose you are the manager of a firm operating in a competitive market. Your cost of production is given by C = 200 +2q2, where q is the level of output and C is total cost. The fixed cost of production is \$200.a.If the price of the product is \$100, how many units of product should you produce to maximize profit?b.What will the profit level be?c.At what minimum price will the firm produce a positive output in short run?
Consumer and Producer Surplus
Price Control and Surplus Changes
Import Tariff
Monopoly 1.One seller - many buyers 2.One product (no good substitutes) 3.Barriers to entry 4.Price Maker
Average and Marginal Revenue
Monopolist’s Output Decision
Monopolist’s Output Decision
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