ECON 201 Lecture Notes - Lecture 8: Average Variable Cost, Average Cost, Marginal Product

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14 Apr 2016
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Change in prices = consume less of the expensive one: subsituion efect subsitute away from expensive good, towards cheaper good, income efect increase in price = have less money to spend, so you consume less. Producion funcion relaionship between quanity of inputs and quanity of output. Types of costs a irm faces and how they generate the irm"s marginal and average cost curves. Increasing returns to scale because of technology of producion. Relaionship between quanity of inputs and quanity of outputs (similar to uility funcion) Fixed input input whose quanity is ixed for a period and cannot be varied: ex: physical capital. Variable input input whose quanity the irm can vary at any ime: ex: labor. Generally categorized into ixed/variable based on how much ime. Long run period in which all inputs can be varied. Short run period in which at least one input is ixed.

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