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Lecture 9

ECON 1100 Lecture 9: econ-1100-lecture-notes-9

5 Pages

Course Code
ECON 1100
Huffman David

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03/08/17 : Ine of SR nest arvne Shape cost minimization in The LR LR cost winner LR not function of SR Cost Armes Shape Danner from no SR production function shape of Mci amount of variable L needed To Shape input produce one more = NL l q - = - 1 - = dg dq MPL ~ lost white 06 L a wage - W as per & Mc i W . 1- Thus , shape of MC homes ufnom MPL MPL . shape of of AVC : Shape AVC = ✓ ( = . L g) W - . q q = W . lay = AVL W . a- . APL cost : of Average Shape - . Ac W 1- ¢ FCAPU of I " 4 n mu Mr " " " "" ¥ µ " of long - Run lasts many possible combinations of K ,L can give same of profit maximization requires ion minimization ofvnw lowest nest combo of kic That of produces heart - minimization choice : uiupnt Def ( lsouost line) shows WU combos of C, K that have same Total cost Total cost of = R . K inputs lsoooorti I = W 'L t v. K ( solve non either C, K ) & k= - . L Er
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