MGMT 4A Lecture Notes - Lecture 4: Fixed Cost, Marginal Product, Diminishing Returns
Document Summary
Meeting short run demand (cid:314) add shifts, hire more workers, more energy and raw materials, 24/7 operations. Costs that do not change with level of output(cid:314) rent, interest on bonds, insurance premiums. Additional utility a consumer gets from a one-unit increase in. If mc=atc then atc is at low point. Envelope of the short run average cost curves. Economies of scale: labor specialization, efficient capital use, efficient factor input use, better use of by products. Larger scale production also allows better use of by products. $ payments firm could have earned by employing its. Smallest level of output where a firm can minimize long-run. Minimum efficient scale: average costs(cid:314) determines how many firms in industry, determines industry competitiveness avg cost curve shape(cid:314) industry structure(cid:314) industry conduct(cid:314) industry performance. Implicit opportunity costs: resources in their best alternative issue. Depreciation measures and accounts for the annual cost of each capital input. Price elasticity of supply: production speed, inventory/excess capacity, time.
