01:220:102 Lecture Notes - Lecture 8: Fixed Cost
1. Basics
1. Law of Diminishing Marginal Productivity or Returns
2. Relationship among Average and Marginal Cost and Product Curves
3. Economies of Scale
4. Relationships
5. Short and Long Run Cost Curves
6. Costs
2. Production
1. Short Run vs. Long Run
1. Law of Diminishing Marginal Productivity or Returns
1. a short run phenomenon
2. at first, production increases at an increasing rate
1. MPPs becoming increasingly larger
2. MPPs- marginal physical products
3.
4. then it increases at a decreasing rate, and eventually decreases
2. Relationship to Costs
1. Average physical product
1. APP = (total output) / (variable input)
2. Marginal physical product
1. MPP = (change in output) / (change in input)
3. The relationship of MPP to APP is the converse of the relationship of
MC to AVC
1. both:
1. as the marginal is less than the average, the average is
declining
2. MPP intersects APP at APP maximum point
find more resources at oneclass.com
find more resources at oneclass.com
chrisfive2005 and 37653 others unlocked
57
01:220:102 Full Course Notes
Verified Note
57 documents