短期生产与成本理论课件

1、Chapter 8production and cost in the short run,Profit is determined not only by the revenue but also by the costs Managers make production decisions in two different decision-making time frame: short-run production decisions and long-run production decision In short-run decision-making situations, a

2、manager has a fixed amount of plant and equipment with which to produce the firms output. The manager can change production levels by hiring more or less labor and purchasing more or less raw material, but the size of the plant is unchangeable.,The basic concepts of production theory,Production The

3、creation of goods and services from inputs or resources Production function A schedule showing the maximum amount of output that can be produced from an specified set of inputs, given the existing technology =(,) Technical efficiency Production of the maximum level of output that can be obtained fro

4、m a given combination of inputs Economic efficiency Production of a given amount of output at the lowest possible cost,Variable input an input for which the level of usage may be changed quite readily like labors, raw materials and energy Fixed input an input for which the level of usage cannot read

5、ily be changed and which must be paid even if no output is produced Quasi-fixed input an input employed in a fixed amount for any positive level of output that need not be paid if output is zero,Short run that period of time in which the level of usage of one or more of the inputs is fixed =(, ) Lon

6、g run the production period when all inputs are variable=(,) Planning horizon the collection of all possible short-run situations a firm may face, on for every level of capital,Variable proportions production Output can be changed in the short run by changing the variable inputs without changing the

7、 fixed inputs Fixed proportions production There is one, and only one, ration or mix of inputs that can be used to produce a good. The producer has little discretion about combination of inputs to employ, the only decision is how much to produce. But fixed-ingredient inputs are really only a short-r

8、un problem,Average product of labor (AP) = Marginal product of labor (MP) =/,Law of diminishing marginal product The principle that as the number of units of the variable input increases, other inputs held constant, a point will reached beyond which the marginal product decrease.,Changes in fixed in

9、puts,Short-run cost of production,Total cost, fixed and variable costs Total fixed cost (TFC): the total amount paid for fixed inputs. Total fixed cost does not vary with output Total variable cost (TVC): the amount paid for variable inputs. Total variable cost increase with increase in output Total

10、 cost (TC): the sum of total fixed cost and total variable cost. Total cost increases with increase in output TC=TFC+TVC,Average and marginal cost Average fixed cost (AFC): AFC=TFC/Q Average variable cost (AVC): AVC=TVC/Q Average total cost (ATC): ATC=TC/Q=AVC+AFC Short-run marginal cost (SMC): = = ,Relations among different costs (p.180) Relations between short-run and production (1) total costs and the short-run production function =+ (2) Average varia