ECON-200 Lecture Notes - Lecture 30: Monopolistic Competition, Incomplete Markets, Perfect Competition
18 Sep 2020
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Types of cost accounting cost - actual expenses, plus depreciation. More connected to the irs than economic cost economic cost - cost of utilizing all resources in production. Concerned w/ what cost will be in the future. Associated w/ forgone opportunities, includes opportunity cost talks about all the costs/resources that the firm can control/change opportunity cost - sometimes synonymous w/ economic cost. Unused opportunities treated as costs (since firms not using resources in the most efficient way) Hidden, but need to be considered in economic decisions sunk cost - shouldn"t be taken into account in economic decisions. Expense that has been made and can"t be recovered: visible and recorded, but shouldn"t be considered for decisions. Certain specialized equipment can"t be converted to do any other tasks >> sunk cost when unused: has opportunity cost of 0 since you can"t use them for anything else. Variable cost (vc) - varies w/ output, dependent on q.
