Economics class notes
You can not select more than 25 topics Topics must start with a letter or number, can include dashes ('-') and can be up to 35 characters long.

March 2 - Cost of Production

Fixed vs Variable Cost

  • Fixed Costs always have to be payed

    • Yearly salary
  • Variable cost changes

    • Hourly paycheck rate
  • Total Cost -- fixed plus variable cost

  • Cost minimization -- the combination of spending that costs the least

  • Marginal cost -- cost of doing something again

    • marginal costs total minus output

Profit Maximizing

  • Output that gives as much profit as possible
  • Marginal revenue -- additional revenue of another unit of output
  • When should a company go out of Business?