Living Economics Table of Contents Opus1 Flash Econ Ulogistics
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4. Production Costs
4.1
A Matter of Costs
The rate at which variable cost changes in the short run is related to the nature of the fixed cost.
4.2
Law of Diminishing Returns - flash
The law of diminishing returns can be represented by a S-shaped production curve in the short run.
4.3
Cost curves under increasing and diminishing returns
Under increasing returns, high fixed cost and low variable cost lead to persistently declining average total cost. The market can accommodate only one firm. Under decreasing returns, low fixed cost and rapidly rising variable cost lead to U-shaped average total cost. The market can accommodate many firms.
4.4
From production function to cost function
Derive the total variable cost from the total product curve using Flash animation.
4.5
From MP to MC
Mirroring MP and MC.
4.6
Generating MC from TVC
Generating MC from TVC.
4.7
Generating AVC from TVC
Generating AVC from TVC.
4.8
Generating AFC from TFC
Generating AFC from TFC.
4.9
Generating ATC from TC
Generating ATC from TC.
4.10
From AFC and AVC to TC
Average total cost can be derived from adding AFC and AVC together or directly from total cost.
4.11
Labor on Call
Flexible work scheduling to match customer traffic is one effective way to transform labor from a fixed cost into a variable cost in the retail business.
4.12
Untangling Marginal vs Average Value
When average value is falling, marginal value is below it. And when average value is rising, marginal value is above it.