23566 Lecture Notes - Lecture 13: Strategic Dominance, Price Discrimination, Technological Change
Document Summary
Total revenue: tr = r (q) > income from sale of output) Total cost: tc = c (q) > amount paid for inputs used to make output) Profit: tr tc = r(q) c(q) > (total revenue total cost) (economic profit < accounting profit) Opportunity costs (all opportunity costs= production costs: explicit costs = costs that need a money outlay. Implicit costs= costs that do(cid:374)(cid:859)t (cid:374)eed a (cid:373)o(cid:374)ey outlay. The production function: shows output vs input quantity, for example, short run: some factors & their costs are fixed, long run: all factors are flexible. Marginal product of labour: increase in output from additional. Formalisation: computing the marginal product of labour as the derivative of function (let l/f/x be any number, not just an integer, marginal product of labour (mpl): is a decreasing function. Diminishing marginal product: marginal product of an input declines as quantity of input increases.
