Demand and Supply Analysis-The Firm III
About the Lecture
The lecture Demand and Supply Analysis-The Firm III by Edu Pristine is from the course Archiv - Economics. It contains the following chapters:
- Economies of scale and diseconomies of scale
- Profit-maximizing level of output
Author of lecture Demand and Supply Analysis-The Firm III
Edu Pristine
Customer reviews
5,0 of 5 stars
| 5 Stars |
|
5 |
| 4 Stars |
|
0 |
| 3 Stars |
|
0 |
| 2 Stars |
|
0 |
| 1 Star |
|
0 |
Excerpts from the accompanying material
-
... scale and diseconomies of scale affect costs ...
-
... by one unit, costs increase by less than one unit " Diseconomies of Scale: Quantity produced increases by one unit, costs increase by ...
-
... " Firms having economies of scale will plan for expansions " Diseconomies of scale can result from factors like labor unions, low competition and obstacle to innovation " Firms facing diseconomies of scale will reduce their outpu t and try to achieve minimum efficient scale or constant retu ...
-
... total cost Minimum efficient scale 4Downward slopping LRATC occurs due to economies of scale. Which eventually become upward slopping as diseconomies of scale comes into play. When average total cost of production is at a minimum, ...
-
... run average total cost decreases by 5% ifoutput is increased by ...
-
... profit is unchanged at 140. " From the 7 th quantity onwards marginal cost exceeds marginal revenue and the firm faces losses as the total cost of production greater than the total revenue " A firm can analyze the quantity to be produced where th e profit can be maximized by comparing marginal cost to marginal revenue or total cost to total revenue " A firm should increase its output until its marginal cost is less than the marginal revenue and will maximize ...
-
... economic profit equals to area A. " At P 2the reduced price, the output is to Q 2,where P=AR=ATC and the economic profit is zero A firm that is operating at MR=MC, but selling below the average variable cost, a shut option is ...
