ECO204Y1 Study Guide - Midterm Guide: Durum
4 Oct 2015
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Max: =rev-cost=output q x output p- (fc + input q x input p) Calc tc, tr, mc, mr. find last (largest) production lvl where mr mc. Production technology the means to turn input into output (diminishing) marginal productivity. Increasing cost industry: as q , p that must be paid to make industry wtsupply this q. Returns to scale crs: f (tk ,tl )=tf (k ,l) f (tk ,tl ) can replicate bep operation for any q-> constant cost = constant rts. Increasing returns to scale-industries: lr-ac may not have a mes (mc = 0).
