![]() M = marginal (for an additional unit of output).LR = long-run (when all input amounts can be adjusted).SR = short-run (when the amount of physical capital cannot be adjusted).There are standard acronyms for each cost concept, expressed in terms of the following descriptors: Some are applicable to the short run, others to the long run. There are various types of cost curves, all related to each other, including total and average cost curves marginal ("for each additional unit") cost curves, which are equal to the differential of the total cost curves and variable cost curves. Profit-maximizing firms use cost curves to decide output quantities. In a free market economy, productively efficient firms optimize their production process by minimizing cost consistent with each possible level of production, and the result is a cost curve. In economics, a cost curve is a graph of the costs of production as a function of total quantity produced.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |