CHAP 11 - ECON 1021

2 Pages
Unlock Document

Economics 1021A/B
Jeannie Gillmore

Chapter 11 – Class Notes  Every firm has one goal  To maximize profit  - by minimizing costs  Short run  At least one factor of production is fixed  Long run  In which all factors of production can be changed  Sunk cost  Marginal product = change in total product when we increase labour by 1**  Always plot at halfway point  Average Product = change in total / change in labour  When marginal product is above average product  average increases  When marginal product is below average product  average falls  At max average product  marginal product = average product  intersect  TC = TVC + TFC (total variable cost + total fix cost)  TVC increases as output increases as TFC remains constant, TC increases as output increases  TC/Q = TVC/Q + TFC/Q (Q = output)  Then we get  ATC = AVC + AFC (average total cost = average variable cost + average fix cost)  Memorize marginal costs and average costs  Avg fixed cost  downward sloping curve  AFC = TFC (constant)/Q (increasing)  have costs regardless of producing or not  as Q increases  curve slopes down  Avg variable cost  U shaped  law of diminishing returns  Avg total cost = sum of AFC + AVC  U shaped b/c upw
More Less

Related notes for Economics 1021A/B

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.