MAE101 Lecture 3: economics notes -20-25
Document Summary
Wheat is inelastic (change in price will lead too a smaller change in quantity) because there are very few substitutes for it: because of this the shift in the supply curve reduces the price of wheat from. The production function: the production function shows the relationship between quantity of inputs used to make a good and the quantity of output of that good. Total-cost curve: this is the cost of all the inputs put together, e. g. Therefore, when the quantity being produced is large, the total-cost curve is relatively steep. The various measures of cost: costs of production may be divided into two types: Variable costs: fixed costs are those costs that do not vary with the quantity of output produced. Rent- rent does not change even if the firm produces nothing: e. g. a book-keeper too pay bills , regardless of the number of goods produced=fixed cost.
