Textbook Notes (368,401)
Canada (161,862)
Economics (818)
ECON 2310 (47)
Chapter 8

Chapter 8 Intermediate Micro Notes

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ECON 2310
Johanna Goertz

Chapter 8 Economics NotesCost81 Types of Costs A firms total cost is the expenditure required to produce that output in the most economical way To make good pricingoutput decisions managers need to now the total cost of producing different levels of output A fixed cost is avoidable if the firm doesnt incur that cost or can recoup it ifit produces no outputVariable cost function describes the variable costs of producing each possible level of output VCVC output82 What do Economic Costs IncludeOpportunity CostsTime given up to run company not shown on firms accountsOpportunity Cost cost associated with foregoing the opportunity to employ a resource in its best alternative use The cost of using a stored input equals the price the firm could sell it for By using inputs a firm foregoes the opportunity to sell themThe User Cost of Capital Most firms own much of the capital they use in production The cost of using capital is equal to the market rental price this is the amount of money the firm forgoes by using its own capital instead of renting it from another firm84 LongRun Cost Cost Minimization W 2 Variable Inputs The isoquant line will show all the input combos th
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