Production Schedule. Production Table 10-0 1-0 14-10 2-1 22-0 1-0 10-0 1-0 22-10 2-1 Increasing Returns to Scale: more than \proportional increase in.

Slides:

Advertisements

Similar presentations

 fixed costs – costs that do not vary with the level of output. Fixed costs are the same at all levels of output (even when output equals zero).  variable.

Advertisements

COSTS OF PRODUCTION Chapters 11. Short-Run vs. Long Run Firms typically have several types of inputs that they can adjust to adjust production. Long-run.

Chapter Twenty-One Cost Curves.

Long-run (the time it takes for the industry to adjust output to the change in demand or supply) equilibrium for the purely competitive firm P Q ATC MC.

Production and Cost in the Long Run Overheads. The long run In the long run, there are no fixed inputs or fixed costs; all inputs and all costs are variable.

Chapter 7Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved 1 ECON Designed by Amy McGuire, B-books, Ltd. McEachern.

CHAPTER 5 The Production Process and Costs Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior.

CH. 11: OUTPUT AND COSTS  Measure of relationship between output and cost  Short run costs  Fixed vs variable  Cost curves  Law of diminishing marginal.

10 Output and Costs Notes and teaching tips: 4, 7, 23, 27, 31, and 54.

Managerial Economics & Business Strategy

Chapter Twenty-One Cost Curves. Fixed, Variable & Total Cost Functions u F is the total cost to a firm of its short- run fixed inputs. F, the firm’s fixed.

Economic vs. Accounting Cost Short-Run vs. Long-Run Decisions Opportunity Cost 8 Behind the Supply Curve: Inputs and Costs.

Chapter 8 – Costs and production. Production The total amount of output produced by a firm is a function of the levels of input usage by the firm The.

11 OUTPUT AND COSTS. 11 OUTPUT AND COSTS Notes and teaching tips: 5, 8, 26, 29, 33, and 57. To view a full-screen figure during a class, click the.

1 ATC AVC MC Relationship Between Average and Marginal Costs Costs per unit Quantity Q1Q1 B Q0Q0 A.

10 OUTPUT AND COSTS CHAPTER.

CH. 10: OUTPUT AND COSTS  Measures of a firm’s costs.  Distinction between the short run and the long run  The relationship between a firm’s output.

9 - 1 Copyright McGraw-Hill/Irwin, 2005 Economic Costs Short-Run and Long-Run Short-Run Production Relationships Short-Run Production Costs Short-Run.

All Rights ReservedMicroeconomics © Oxford University Press Malaysia, – 1 1MICROECONOMICS.

Cost Analysis and Estimation

CH. 11: OUTPUT AND COSTS Measure of relationship between output and cost Production function Shows relationship between inputs and output Law of diminishing.

Production and Cost Production Function Inputs Output (s) Cost Function At Given Output Level Inputs Unit Input Needed Price Based on Production Function.

Costs of Production KW Chapter 8. Costs: Explicit vs. Implicit Explicit Costs of Production: Direct payments for resources not owned by a firm (raw materials,

The Costs of Production Chapter 8 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

The Costs of Production Chp: 8 Lecture: 15 & 16. Economic Costs  Equal to opportunity costs  Explicit + implicit costs  Explicit costs  Monetary payments.

Mohammad S. A. Khan Mamun, PhD Department of Economics Cost of Production & Cost Curves.

Copyright McGraw-Hill/Irwin, 2005 Economic Costs Short-Run and Long-Run Short-Run Production Relationships Short-Run Production Costs Short-Run.

8 - 1 Economic Costs Short-Run and Long-Run Short-Run Production Relationships Short-Run Production Costs Short-Run Costs Graphically Productivity and.

The Production Process and Costs

PPA 723: Managerial Economics Study Guide: Production, Cost, and Supply.

Topics Covered: Production in the LR Costs in the LR LRAC curves LRMC Curves The relationship between SRAC and LRAC curves.

Analyzing Costs

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. The Costs of Production Chapter 8.

Chapter 7 The Cost of Production. ©2005 Pearson Education, Inc. Chapter 72 Topics to be Discussed Measuring Cost: Which Costs Matter? Cost in the Short.

1 Long-Run Costs and Output Decisions Chapter 9. 2 LONG-RUN COSTS AND OUTPUT DECISIONS We begin our discussion of the long run by looking at firms in.

COST OF PRODUCTION. 2 Graphing Cost Curves Total Cost Curves: The total variable cost curve has the same shape as the total cost curve— increasing output.

Economies of Scale Chapter 13 completion. The Shape of Cost Curves Quantity of Output Costs $ MC ATC AVC AFC.

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

Long-run costs. Firms in the long run can make all the resource adjustment they desire. √ If the number of possible plant sizes is large, the long-run.

1 Short Run Short run: The quantity of at least one input, (ie: factory size) is fixed and the quantities of the other inputs, (ie: Labour) can be varied.

Cost Curve Model Chapter 13 completion. Costs of Production Fixed costs - do not change with quantity of output Variable costs - ↑ with quantity of output.

 What will costs look like when the firm can choose the best plant size for any given situation?  For every plant capacity size, there is a short- run.

October 30, 2014 AP Economics 1.Return and Review Quiz 2.Lesson 3-3: LRATC.

CH. 11: OUTPUT AND COSTS Measure of relationship between output and cost Production function Shows relationship between inputs and output Law of diminishing.

Chapter 4: Production and the Costs of Production

AP MICROECONOMICS UNIT #3 Production and Costs

Businesses and the Costs of Production

8 The Costs of Production.

20 The Costs of Production.

10 Businesses and the Costs of Production McGraw-Hill/Irwin

Chapter 8 The Costs of Production.

Cost Curves & Competitive Markets Test

Cost Curve Model Chapter 13 completion.

Cost Curve Model Chapter 13 completion.

წარმოების დანახარჯები

Businesses and the Costs of Production

CH. 11: OUTPUT AND COSTS Measure of relationship between output and cost Production function Shows relationship between inputs and output Law of diminishing.

8 The Costs of Production.

Production And Cost in the Long Run

Costs in the Short Run Three Costs Marginal Cost Average Total Cost

Economies of Scale Chapter 13 completion.

Businesses and the Costs of Production

Chapter 4 The supply decision

20 The Costs of Production.

The Costs of Production

EQUATION 6.1 Model of a Long-Run Production Function

Businesses and the Costs of Production

The Production Function II

Presentation transcript:

Production Schedule

Production Table Increasing Returns to Scale: more than \proportional increase in output relative To increase in inputs. 200% higher output=(30-10)/10 100% higher inputs (2-1)/1

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 Isoquant: how get job done: tell me the ways!

Cost Table ($200 per nurse, $600 per doctor) Equation: Patients served = 5*Doctors + 5* Nurses

Cost Effective Choice (least cost) for isoquant of 15 patients Equation: Patients served = 5*Doctors + 5* Nurses

Cost Effective Choices for all isoquants Equation: Patients served = 5*Doctors + 5* Nurses

Cost schedule OUTPUTVariable CostAverage Variable Cost Marginal Cost =200/5= =400/10=40=( )=

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