ECON 040 Lecture Notes - Lecture 11: Marginal Revenue, Sunk Costs, Marginal Cost

9 views2 pages

Document Summary

Major difference from prior model in application to a real firm: Entrepreneur must pay a sunk cost to start production a cost that cannot be recovered. Fixed factor of production the associated fixed cost does not vary with quantity produced. Variable factor of production the associated variable cost varies with quantity produced. Short run - period of time when at least one factor of production is fixed. Long run period of time during which all factors of production are variable. The entrepreneur"s decisions may differ depending on the short/long run. The entrepreneur sells cans of soda for . 20. Machinery rented at a day (fixed cost) Employees cost a day (variable cost) Table then shows the number of cans that can be produced depending on how many employees are hired. Calculate marginal cost of each can: assess the change in total cost ( tc) and divide by change in quantity of cans produced ( q) (sh. 30)

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

Related Questions