Economics 1021A/B Lecture Notes - Lecture 15: Average Cost, Average Variable Cost, Sunk Costs

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Nicholas Kahnert

Document Summary

Price ceilings/floors and when they matter- when they cause deadweight loss. Taxes- how tax incidence is determined, when it leads to dead weight loss. Looking at graph, be able to determine where tax is attributable to buyer/seller. Able to calculate deadweight loss and tax revenue. If you know some of the tax incidence falls on buyer part on seller, be able to calculate what portion to white. 10- what/how much/how producer makes- not just accounting cost, but also oc (know normal profit) The firm makes many decisions to achieve its main objective: profit maximization. Trying to make it at the lowest possible cost. All decisions can be placed in two time frames: Time frame in which the quantity of one or more resources used in production is fixed (there"s o(cid:374)e fa(cid:272)tor that we are(cid:374)"t (cid:272)ha(cid:374)gi(cid:374)g! Usually (cid:272)apital- plant size) (labour usually changes- if its slow at work you get to go home, yay. )