Ch 6.docx

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Department
Economics
Course
ECO440H5
Professor
Multiple Professors
Semester
Winter

Description
Ch 6 Supply Costs economies of scale and the supply curveeconomic productive efficiency a situation in which a producer cannot produce more without increasing costeconomic profit total revenue minus total cost and distinct from normal profiteconomies of scale the condition under which longrun average cost decreases as output increasesfixed cost a cost of production that does not vary with the level of outputnormal profit the return a firm receives from inputs such as a directors role in organizaing and running the business This is part of the firms opportunity costproducer surplus the difference betweent the amount the producer receives from the sale of a good and the lowest amount that producer is willing to accept for that goodscale effiency a situation where the provider is producing at an output level such that average is minimizedvariable cost a cost of production that varies directly with the level of outputCost functionscost functions show the relationship between total costs and outputin the short run fixed costs remain constant and are incurred even when output is 0 variable costs increase with the level out outputNeed table 53 to do this as well
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