ECO100Y1 Lecture 13: Production and Cost Schedules Cont.

68 views3 pages
5 Apr 2017
School
Department
Course

Document Summary

Firm"s long run atc schedule: in short run, gm must hire more workers to increase output ( law of diminishing returns applies, in long run, gm can build more assembly plants as well as hire more workers. Mp does not necessarily fall after some point. Short run (there is a fixed fixed factor of production): atc is u-shaped. Long run (no fixed factor) atc is not necessarily u-shaped. Atc = afc + avc: afc [=tfc/q] continuously falls as q increases, avc [=tvc/q] eventually rises as q increases since mc eventually rises as q increases [due to law of diminishing returns] Remember: in the short run, there is a fixed factor of production. Long run atc: lowest atc for producing each level of output [efficient production, may at first exhibit economies of scale and, later, diseconomies of scale [see text, figure.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related textbook solutions

Related Documents

Related Questions