1. COSTS, OUTPUT AND OPTIMAL QUANTITY OF PRODUCTION

2. Types of the firm’s costs
Revenue, costs and profit
Volume of production. Breakeven price

3. Types of the firm’s costs
The production costs are all the expenses used to be paid out by the firm in order to produce the goods
The cost of producing a firm’s output depends on how much labor and physical capital the firm uses.
Producers calculate Cost because of its influence on the firm’ revenue (= Output = Price x Quantity)
Revenue = Costs + Profit
So, if costs , Profit
Hence cost is the metric used in the standard modeling paradigm applied to economic processes.

7. Supply elasticity

8. Supply elasticity

9. Supply elasticity

10. Supply elasticity

11. Supply elasticity

18. Since supply is proportional to price, a price floor creates excess supply if the legal price is above the market price. Suppliers are willing to supply more at the price floor than the market wants at that price.

48. HOMEWORK: TO SOLVE THE EXERCISE AND FILL THE EMPTY CELLS IN THE TABLE BELOWQ
AFC VC
ATC MC TC FC
AVC
100 10 20 5 14 30 7
450 40
420 50 2