bob

- APP=TPP/#workers
- MPP=change TPP/change #workers
- When MPP is at highest value, MC is at lowest value
- TC=TFC + TVC
- AVC=TVC/Q first falls then rises law of Diminishing Marginal Returns
- AFC=TFC/Q decreases as output increases
- ATC=TC/Q AFC+AVC first falls then rises law of Diminishing Marginal Returns
- MC= Change in TC / Change in Q. initially falls then rises as output rises
- SRATC=TC / Total Q when one resource is fixed
- Profit=TR-TC TR=P x Q profit max where MC=MC elasticity of demand=1
- Short run- at least 1 input resource fixed, LR-all resources variable
- MC intersects ATC and AVC at min. value points
- LRATC- lowest cost combo of resources with which each Level of output is produced when all resources are variable
- Economy of scale: P falls as Q rises. Diseconomy of scale: P rises as Q rises Constant returns to scale P constant as Q rises
- Causes of Economy of scale: employee specialization, machinery efficiency
- Causes of Diseconomy of scale: dif...