ECON 3200 Lecture Notes - Lecture 1: Mycoplasma, American Broadcasting Company, Aith
12 Nov 2015
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Why are large firms popular: economies of scale, (if fixed costs are large, cost per unit falls as output increases, leading to lower variable cost, larger firms have easier access to borrow money (access loans, larger firms often have market power, reducing welfare, influencing product pricing, economies of scope, (combine several interrelated activities at one firm, lowering the costs of production). Average total cost (atc) = total cost / q (output is quantity produced or q") Average variable cost (avc) = total variable cost / qaverage fixed. Total cost (tc) = (avc + afc) x output (which is q) Total variable cost (tvc) = avc x output. Total fixed cost (tfc) = tc tvc. Marginal cost (mc) = change in total costs / change in output. Marginal product (mp) = change in total product / change in. Marginal revenue (mr) = change in total revenue / change in q. Average product (ap) = tp / variable factor.
