ECON 102 Lecture Notes - Lecture 21: Bargaining Power
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ECON 102 Full Course Notes
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Larger the firm, the less risky the loan, the lower the interest rate: bargaining power over supplies. If firm takes business elsewhere it would make difficult times for supplies. #2 minimum efficient scale point (mes: the point on the lrac where the firm first realizes its lower avg. cost, the first q where avg. cost is minimum. #3 constant returns to scale: the portio(cid:374) of the lrac (cid:449)here a(cid:448)g. costs re(cid:373)ai(cid:374)s co(cid:374)sta(cid:374)t as q "s, minimum efficient is included in this portion\ #4 diseconomies of scale: portio(cid:374) of the lrac (cid:449)here a(cid:448)g. cost as q , firms never want to produce in this region. If they are producing in this region they reduce q in order to get back to constant returns to scale portion. Isocost/isoquants are the fir(cid:373)"s (cid:448)ersio(cid:374) of the co(cid:374)su(cid:373)ers (cid:862)budget constraints(cid:863)/i(cid:374)differe(cid:374)ce cur(cid:448)es: isoquants. A curve showing all combinations of 2 inputs that can be employed to produce a given q: isocost.
