Escolar Documentos
Profissional Documentos
Cultura Documentos
Learning Objectives
Discuss the difference between the short run and the long run from the perspective of a firm
Understand why the marginal physical product of labor eventually declines as more units of labor are employed Explain the short-run cost curves a typical firm faces Describe the long-run cost curves a typical firm faces
or
Q = (K,L)
Q = output/time period K = capital L = labor
8
10
E-Commerce Example: Put Away the Clay and Turn on the Holographic Camera
Once a company has integrated a holographic camera system into its existing computer network, creating holographic designs takes less time. Consequently, product developers using holographic techniques can now create more designs while utilizing fewer labor resources.
11
E-Commerce Example: Put Away the Clay and Turn on the Holographic Camera
Why do technological improvements often reduce labor requirements for specific tasks, thereby allowing labor to be utilized for other purposes?
12
13
The Production Function and Marginal Product: A Hypothetical Case, Panel (a)
15
16
17
18
19
Fixed Costs
Costs that do not vary with output
Variable Costs
Costs that vary with the rate of production
23
24
25
26
27
28
29
30
31
32
34
35
36
37
38
39
40
41
42
43
Question
Why do you think the long-run average cost curve is U-shaped?
44
Diseconomies of scale
45
Economies of Scale, Constant Returns to Scale, and Diseconomies of Scale Shown with Long-Run Average Cost Curve
46
47
48
49
50
52