Production Schedule. Production Table Production Table for a Linear Production Function Equation: Patients served = 5*Doctors + 5* Nurses.

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Presentation transcript:

Production Schedule

Production Table

Production Table for a Linear Production Function Equation: Patients served = 5*Doctors + 5* Nurses

Production Table for a Linear Production Function Equation: Patients served = 5*Doctors + 5* Nurses

Production Table for a Min() Production Function Equation: Patients served = 10*Min(Doctors, Nurses)

Production Table for a Multiplicative Function Equation: Patients served = 5*Doctors* Nurses

Nurses Patients/Nurse with 2 doctors with 1 doctor Marginal Productivity of Nurses

Nurses with 2 doctors with 1 doctor MARGINAL PRODUCT CURVES TOTAL PRODUCT CURVES with 2 doctors with 1 doctor Patients/Day Nurses Patients/nurse

SATELLITE SHORT RUN COSTS Voice Total ATC AVC MC Chan- Cost ($/Vch)($/VCh)($/VCh) nels ($/mo.) 0 30,000* , , , , , *FIXED COST: Cost at ZERO output

SATELLITE SHORT RUN COST MC ATC $/VOICE CHANNEL VOICE CHANNELS AVC Shut down price

COMPETING TELECOMMUNICATION TECHNOLOGIES: LONG RUN ATC Voice Satel- Micro- Copper Fiber Exit Long- chan- lite wave Cable Optic run ATC nels ($/VCh)($/VCh)($/VCh)($/VCh)($/Vch)($/VCh

TELECOMMUNICATION AVERAGE COST COPPER FIBER OPTIC MICRO- WAVE SATELLITE

TELECOMMUNICATION AVERAGE COST Copper Fiber Optic Microwave Satellite LONG RUN AVERAGE COST

SOURCES OF ECONOMIES OF SCALE * SPECIALIZATION AND DIVISION OF LABOR * INDIVISIBILITIES * DIMENSIONAL RELATIONSHIPS * MARKET SIZE AND NETWORK EXTERNALITIES * MULTIPLANT ECONOMIES * INCREASING RETURNS EXISTS

SOURCES OF DISECONOMIES OF SCALE * PHYSICAL CONSTRAINTS * MANAGERIAL CONTROL LOSS * COSTS OF CENTRALIZATION * INCREASING RETURNS EXISTS NOWHERE

CHAPTER 10: COPIER PRODUCTION copiers Short run Average Costs: Long Run month Plant #1 Plant #2 Plant #3 Plant #4 Av. Cost * 6500* * **

copiers Short run Average Costs: Long Run month Plant #1 Plant #2 Plant #3 Plant #4 Av. Cost Minimum of Short Run Average Cost * 6500* * ** EFFICIENT UTILIZATION (Short Run)

copiers Short run Average Costs: Long Run month Plant #1 Plant #2 Plant #3 Plant #4 Av. Cost Minimum of Long Run Average Cost * 6500* * ** MOST EFFICIENT INVESTMENT(LR)

copiers Short run Average Costs: Long Run month Plant #1 Plant #2 Plant #3 Plant #4 Av. Cost Lowest AC at each output level * 6500* * ** TECHNICALLY EFFICIENT CHOICES

copiers Short run Average Costs: Long Run month Plant #1 Plant #2 Plant #3 Plant #4 Av. Cost Minimum of Long Run Average Cost * 6500* * ** MOST EFFICIENT INVESTMENT(LR)

Copiers per month Price ($/copier) 4 COPIER PRODUCING PLANTS LRAC #4 #3 #2 #1

Copiers per month Price ($/copier) #4 #3 #2 #1 ENVELOPE OF TECHNICALLY EFFICIENT POINTS TECHNICAL EFFICIENCY LOWEST AC AT EACH OUTPUT

Copiers per month Price ($/copier) #4 #3 #2 #1 CAPACITY UTILIZATION EFFICIENT SHORT RUN EFFICIENCY MINIMUM OF EACH SHORT RUN AVERAGE COST CURVE

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