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UA / Economics / ECON 110 / What are the fixed costs?

What are the fixed costs?

What are the fixed costs?

Description

School: University of Alabama - Tuscaloosa
Department: Economics
Course: Principles of Microeconomics
Professor: Tao yeh
Term: Fall 2016
Tags: Microeconomics
Cost: 25
Name: Ch. 7 Notes
Description: These notes are for Ch. 7 of Microeconomics as offered by the University of Alabama.
Uploaded: 10/15/2016
2 Pages 46 Views 5 Unlocks
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) Study


What is fixed costs?



Chapter 7: Production, Inputs, and Cost Vocabulary:

• Fixed costs Short run oTotal Physical Product

• Variable Cost oLong run 4. Average Physical Product.

• Marginal Physical Product Marginal Revenue Product and

• Law of Diminishing Returns o marginal Cost oTotal costs ar o Total Fixedl Variable Costs - Average cost omarginal Cost o Average Fixed / Variable costs Increasing Returns to scale.


Costs are minimized when?



If you want to learn more check out What is the difference between positive reinforcement and negative reinforcement?

• Constant Returns to Scale Decreasing Returns to Scale vo po Definitions: oFixed Costs: the costs of inputs whose quantity does not vary with output and which are incussed even when output is O.

o Variable Costs: costs which change with output. notes

• Short Run: a time horizon within which only variable inputs


What is variable costs?



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can be adjusted while fixed inputs remain unchanged. antoa

• Long Run: a time horizon within which both fixed and variable inputs can be adjusted. cold son los son

•Total Physical Product & the total output obtained from a

given quantity of input. (TPP) er ein Jeram nein

• Average Physical Product (APP): When x = quantity of input, If you want to learn more check out Is it poor people's fault that they're poor?

APP = TPPIX lo marginal Physical Procluct: (mep) the increase in total output

resulting from one unit increase in the input mpp: ATPPI AX lo marginal Revenue Product (MRP): the increase in total revenue We also discuss several other topics like What is one of the firsts animals to be domesticated?
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that results from a one unit increase in input. MRP mppx price of outpu

Law of Diminishing Returns: as one variable input is increased while all others remain fixed, a point will be reached beyond which the map of the input will begin to decrease. lo marginal Cost: the increase in cost which results from raising

output by one unit, me ATC/AQ

•Total Costs (TC): payment to all inputs. TC = TFC + TVC

• Total Fixed / Variable costs: payment to fixed variable inputs.

• Average Cost : TC IQ, AC= AFC 8+ AVC

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ol bro, sinontanborror vegan Definitions: o Average Fixed Variable Cost: ALENCIQ crea bexig. o marginal Costo mc = ATC IAQ = ATVCI AQ droo edonor o Increasing Returns to Scale : (IRS) when all inputs are m increased by the same proportion, output rises by more than that proportion (note: this curve has a negative slope). o Constant Returns to Scale CCRS): when all inputs change a by the same proportion, output changes by exactly the

same proportion. (note: this curve is a horizontal line). N o

• Decreasing Returns to scale CD RS): when all inputs change by the same proportion, output changes by less than that

proportion (note: this curve has a positive slope). Ant main Ideas para dona mirtius rosinon ont som hon o o Optional Production: the firm should hire input until

MRP = price of input wie noriran ventor odprode o marginal - Average Rules: barilo sa oras canon eonroe

some must equal AC when AC is at its minimushoto

o When mc>AC, AC is rising. It tagaito tirous novel

too. When meLAC, AC is falling. Du bord serat your la a

• Cost-Minimization of Two Inputs

also 2 999 tugto costs are minimized when tussen onprange

XAISITA 929 x MPPA MPPB tion and wood priti Nest

Sou In other words, when product per dollar is equal for

be bothinputs, cost is minimized, prven o - croped boder so vies trigo mox it and events o n

9220bo odres Jugewoon

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