ECON 1 Lecture Notes - Lecture 10: Sunk Costs, Fixed Cost, Opportunity Cost
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ECON 1 Full Course Notes
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Econ 1 - lecture 10 - shifts in supply. This is your best way to pass the quiz. Supplementary reading: "the wonderful world of adam smith" Question about it will be on the quiz. Sunk cost does not affect short term strategy. Fisherman out at night, for gas. Villagers buy their dinner from fishermen the next morning. At , all ten will be supplied. At , all ten will be supplied. This is because the fishermen are trying to get as much money back as possible. Fixed cost does not affect short-run cost, because cost is the same whether they sell or not. They have to sell at because if they don"t, they lose even more. The fishermen are going to provide 10 fish at any price. The competitive equilibrium price is , since that"s where it intersects with the demand curve. Price is , cost is , profit is .
