ECON-1006EL Lecture Notes - Lecture 12: Marginal Cost, Marginal Product, Fixed Cost

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Chapter 11: behind the supply curve: inputs and costs. Differences between the short run and the long run. Production function: q= f (k, l: in the short run, managers must keep k constant. K (capital) cannot be changed in the short run. In the long run, managers can vary all inputs. This additional freedom in the long run means. The fixed relationship between mp and ap curves. Marginal cost: the additional cost of producing an extra unit of output. Marginal product: the additional quantity of output that is produced by using one more unit of that input, holding other inputs and the production technology fixed. Average product: the amount of output produced per unit of that input. In the long run, all inputs, l and k are variable. Lrtc (long run total cost) < srtc (short run total cost) for any q. Lrac (long run average cost) < srac (short run average cost) for any q.

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