ISDS 3115 Chapter : Ch07
15 Mar 2019
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Today"s menu: friday 20 june 2014: business, practice problems, second exam: next thursday, chapter 13: 1, 2, 5, 7, 8, 11, 15-17, 21. Substance: theory of the firm: the basics, profit, maximizing rule: mr = mc, normal = normal economic profit = zero economic profit (equilibrium) Economic profit 0 = total revenue explicit implicit. Positive: examples, costs, marginal (mc) = change in total cost divided by the change in, variable (vc) = costs that vary that change. Function of your: total (tc) = fixed cost (fc) + variable cost (vc, fixed (fc) = costs that are fixed that don"t change. Independent of your level of production. level of production. Production increases variable costs go up output. Total cost = fixed cost + variable cost. Mc = fixed cost/quantity + variable cost/quantity 0 + variable cost/quantity = mc. All firm: examples with the average, if it goes up or down. Profit = p x q atc x q.
