Enviar búsqueda
Cargar
The Production Process: The Behavior of Profit Maximizing Firms
•
Descargar como PPT, PDF
•
32 recomendaciones
•
12,738 vistas
Noel Buensuceso
Seguir
Empresariales
Vista de diapositivas
Denunciar
Compartir
Vista de diapositivas
Denunciar
Compartir
1 de 24
Descargar ahora
Recomendados
Ch05:household behavior and consumer choice
Ch05:household behavior and consumer choice
Sonali Bank Limited
The profit maximizing firm
The profit maximizing firm
Jassen Jiary
Costs Of Production Micro Economics ECO101
Costs Of Production Micro Economics ECO101
Sabih Kamran
Household Behavior and Consumer Choice
Household Behavior and Consumer Choice
Noel Buensuceso
Profit maximization
Profit maximization
Abhishek Eraiah
The Theory of Individual Labor Supply
The Theory of Individual Labor Supply
ecogeeeeeks
Short-Run Costs and Output Decisions
Short-Run Costs and Output Decisions
Noel Buensuceso
Marginal and average cost
Marginal and average cost
bernamarcos
Recomendados
Ch05:household behavior and consumer choice
Ch05:household behavior and consumer choice
Sonali Bank Limited
The profit maximizing firm
The profit maximizing firm
Jassen Jiary
Costs Of Production Micro Economics ECO101
Costs Of Production Micro Economics ECO101
Sabih Kamran
Household Behavior and Consumer Choice
Household Behavior and Consumer Choice
Noel Buensuceso
Profit maximization
Profit maximization
Abhishek Eraiah
The Theory of Individual Labor Supply
The Theory of Individual Labor Supply
ecogeeeeeks
Short-Run Costs and Output Decisions
Short-Run Costs and Output Decisions
Noel Buensuceso
Marginal and average cost
Marginal and average cost
bernamarcos
Perfectly competitive market
Perfectly competitive market
Dr. Shweta Uppadhyay
Perfect competition
Perfect competition
Suresh Madhavan
The Economic Problem: Scarcity and Choice
The Economic Problem: Scarcity and Choice
Noel Buensuceso
Comparative Advantage
Comparative Advantage
Cesar Sobrino
Production Managerial Economics
Production Managerial Economics
Nethan P
Consumer Behavior & Utility Maximization Micro Economics ECO101
Consumer Behavior & Utility Maximization Micro Economics ECO101
Sabih Kamran
Unit -2 : lecture-2 (absolute advantage theory)
Unit -2 : lecture-2 (absolute advantage theory)
Dr.B.B. Tiwari
Monopolistic Competition
Monopolistic Competition
tutor2u
Monopolistic Competition and Oligopoly
Monopolistic Competition and Oligopoly
Noel Buensuceso
Adam Smith theory of international trade
Adam Smith theory of international trade
zeddem
Perfect Competition
Perfect Competition
tutor2u
The Scope and Method of Economics
The Scope and Method of Economics
Noel Buensuceso
Monopolistic competition
Monopolistic competition
Prabha Panth
The fundamentals of managerial economics
The fundamentals of managerial economics
Jasil Raj
Ricardian model
Ricardian model
Julio Huato
production function with 2 variable inputs return to scale
production function with 2 variable inputs return to scale
Nabil Ashraf
Market structures – perfect competition
Market structures – perfect competition
ishwarijoshi
Monopoly
Monopoly
Tuul Tuul
Introduction to managerial economics
Introduction to managerial economics
International advisers
Classical school of economy
Classical school of economy
Maxamud Xoday
Input Demand: The Labor and Land Markets
Input Demand: The Labor and Land Markets
Noel Buensuceso
Lecture 11 market structure- perfect competition
Lecture 11 market structure- perfect competition
vivek_shaw
Más contenido relacionado
La actualidad más candente
Perfectly competitive market
Perfectly competitive market
Dr. Shweta Uppadhyay
Perfect competition
Perfect competition
Suresh Madhavan
The Economic Problem: Scarcity and Choice
The Economic Problem: Scarcity and Choice
Noel Buensuceso
Comparative Advantage
Comparative Advantage
Cesar Sobrino
Production Managerial Economics
Production Managerial Economics
Nethan P
Consumer Behavior & Utility Maximization Micro Economics ECO101
Consumer Behavior & Utility Maximization Micro Economics ECO101
Sabih Kamran
Unit -2 : lecture-2 (absolute advantage theory)
Unit -2 : lecture-2 (absolute advantage theory)
Dr.B.B. Tiwari
Monopolistic Competition
Monopolistic Competition
tutor2u
Monopolistic Competition and Oligopoly
Monopolistic Competition and Oligopoly
Noel Buensuceso
Adam Smith theory of international trade
Adam Smith theory of international trade
zeddem
Perfect Competition
Perfect Competition
tutor2u
The Scope and Method of Economics
The Scope and Method of Economics
Noel Buensuceso
Monopolistic competition
Monopolistic competition
Prabha Panth
The fundamentals of managerial economics
The fundamentals of managerial economics
Jasil Raj
Ricardian model
Ricardian model
Julio Huato
production function with 2 variable inputs return to scale
production function with 2 variable inputs return to scale
Nabil Ashraf
Market structures – perfect competition
Market structures – perfect competition
ishwarijoshi
Monopoly
Monopoly
Tuul Tuul
Introduction to managerial economics
Introduction to managerial economics
International advisers
Classical school of economy
Classical school of economy
Maxamud Xoday
La actualidad más candente
(20)
Perfectly competitive market
Perfectly competitive market
Perfect competition
Perfect competition
The Economic Problem: Scarcity and Choice
The Economic Problem: Scarcity and Choice
Comparative Advantage
Comparative Advantage
Production Managerial Economics
Production Managerial Economics
Consumer Behavior & Utility Maximization Micro Economics ECO101
Consumer Behavior & Utility Maximization Micro Economics ECO101
Unit -2 : lecture-2 (absolute advantage theory)
Unit -2 : lecture-2 (absolute advantage theory)
Monopolistic Competition
Monopolistic Competition
Monopolistic Competition and Oligopoly
Monopolistic Competition and Oligopoly
Adam Smith theory of international trade
Adam Smith theory of international trade
Perfect Competition
Perfect Competition
The Scope and Method of Economics
The Scope and Method of Economics
Monopolistic competition
Monopolistic competition
The fundamentals of managerial economics
The fundamentals of managerial economics
Ricardian model
Ricardian model
production function with 2 variable inputs return to scale
production function with 2 variable inputs return to scale
Market structures – perfect competition
Market structures – perfect competition
Monopoly
Monopoly
Introduction to managerial economics
Introduction to managerial economics
Classical school of economy
Classical school of economy
Destacado
Input Demand: The Labor and Land Markets
Input Demand: The Labor and Land Markets
Noel Buensuceso
Lecture 11 market structure- perfect competition
Lecture 11 market structure- perfect competition
vivek_shaw
Profit maximization
Profit maximization
ix Tine
elasticity and its application
elasticity and its application
itmamul akwan
Economies Of Scale
Economies Of Scale
guest9188c15
Perfect competition
Perfect competition
Kinshook Chaturvedi
Destacado
(6)
Input Demand: The Labor and Land Markets
Input Demand: The Labor and Land Markets
Lecture 11 market structure- perfect competition
Lecture 11 market structure- perfect competition
Profit maximization
Profit maximization
elasticity and its application
elasticity and its application
Economies Of Scale
Economies Of Scale
Perfect competition
Perfect competition
Similar a The Production Process: The Behavior of Profit Maximizing Firms
Ch09
Ch09
patriciatamio
Ch08
Ch08
Noel Buensuceso
Ch06
Ch06
Malcolm Harrison
EEE 452 Lec 02.ppt
EEE 452 Lec 02.ppt
AsheakArmanKhan20132
Ch05
Ch05
patriciatamio
Ch05
Ch05
patriciatamio
The Labor and Land market
The Labor and Land market
Noel Buensuceso
The Scope and Method of Economics
The Scope and Method of Economics
Rinolveda
Ch08
Ch08
patriciatamio
Ch08
Ch08
patriciatamio
Ch02
Ch02
patriciatamio
The Economic Problem: Scarcity and Choice
The Economic Problem: Scarcity and Choice
Rinolveda
The Capital Market and the Investment Decision
The Capital Market and the Investment Decision
Noel Buensuceso
Ch10
Ch10
patriciatamio
Ch07
Ch07
patriciatamio
Ch07
Ch07
patriciatamio
Ch07
Ch07
patriciatamio
Ch11
Ch11
patriciatamio
Scope & Method of Economics
Scope & Method of Economics
Shekinah Cervantes
Ch12
Ch12
Malcolm Harrison
Similar a The Production Process: The Behavior of Profit Maximizing Firms
(20)
Ch09
Ch09
Ch08
Ch08
Ch06
Ch06
EEE 452 Lec 02.ppt
EEE 452 Lec 02.ppt
Ch05
Ch05
Ch05
Ch05
The Labor and Land market
The Labor and Land market
The Scope and Method of Economics
The Scope and Method of Economics
Ch08
Ch08
Ch08
Ch08
Ch02
Ch02
The Economic Problem: Scarcity and Choice
The Economic Problem: Scarcity and Choice
The Capital Market and the Investment Decision
The Capital Market and the Investment Decision
Ch10
Ch10
Ch07
Ch07
Ch07
Ch07
Ch07
Ch07
Ch11
Ch11
Scope & Method of Economics
Scope & Method of Economics
Ch12
Ch12
Más de Noel Buensuceso
Strategy Review, Evaluation, and Control
Strategy Review, Evaluation, and Control
Noel Buensuceso
Implementing Strategies:Management Issues
Implementing Strategies:Management Issues
Noel Buensuceso
Implementing Strategies
Implementing Strategies
Noel Buensuceso
Strategy Analysis and Choice
Strategy Analysis and Choice
Noel Buensuceso
Monopolistic Competition and Oligopoly
Monopolistic Competition and Oligopoly
Noel Buensuceso
Monopoly
Monopoly
Noel Buensuceso
General Equilibrium and the Efficiency of Perfect Competition
General Equilibrium and the Efficiency of Perfect Competition
Noel Buensuceso
Long-run and Short-run Concerns
Long-run and Short-run Concerns
Noel Buensuceso
Measuring National output and National Income
Measuring National output and National Income
Noel Buensuceso
Strategies in Action
Strategies in Action
Noel Buensuceso
Introduction to Macroeconomics
Introduction to Macroeconomics
Noel Buensuceso
Income Distribution and Poverty
Income Distribution and Poverty
Noel Buensuceso
Monopoly
Monopoly
Noel Buensuceso
Strategy Review, Evaluation, and Control
Strategy Review, Evaluation, and Control
Noel Buensuceso
International Trade, Comparative Advantage, and Protectionism
International Trade, Comparative Advantage, and Protectionism
Noel Buensuceso
Strategy Review, Evaluation, and Control
Strategy Review, Evaluation, and Control
Noel Buensuceso
Ch19
Ch19
Noel Buensuceso
Aggregate Demand, Aggregate Supply, and Inflation
Aggregate Demand, Aggregate Supply, and Inflation
Noel Buensuceso
Implementing Strategies ( Part 2 )
Implementing Strategies ( Part 2 )
Noel Buensuceso
Implementing Strategies ( Part 1 )
Implementing Strategies ( Part 1 )
Noel Buensuceso
Más de Noel Buensuceso
(20)
Strategy Review, Evaluation, and Control
Strategy Review, Evaluation, and Control
Implementing Strategies:Management Issues
Implementing Strategies:Management Issues
Implementing Strategies
Implementing Strategies
Strategy Analysis and Choice
Strategy Analysis and Choice
Monopolistic Competition and Oligopoly
Monopolistic Competition and Oligopoly
Monopoly
Monopoly
General Equilibrium and the Efficiency of Perfect Competition
General Equilibrium and the Efficiency of Perfect Competition
Long-run and Short-run Concerns
Long-run and Short-run Concerns
Measuring National output and National Income
Measuring National output and National Income
Strategies in Action
Strategies in Action
Introduction to Macroeconomics
Introduction to Macroeconomics
Income Distribution and Poverty
Income Distribution and Poverty
Monopoly
Monopoly
Strategy Review, Evaluation, and Control
Strategy Review, Evaluation, and Control
International Trade, Comparative Advantage, and Protectionism
International Trade, Comparative Advantage, and Protectionism
Strategy Review, Evaluation, and Control
Strategy Review, Evaluation, and Control
Ch19
Ch19
Aggregate Demand, Aggregate Supply, and Inflation
Aggregate Demand, Aggregate Supply, and Inflation
Implementing Strategies ( Part 2 )
Implementing Strategies ( Part 2 )
Implementing Strategies ( Part 1 )
Implementing Strategies ( Part 1 )
Último
joint cost.pptx COST ACCOUNTING Sixteenth Edition ...
joint cost.pptx COST ACCOUNTING Sixteenth Edition ...
NadhimTaha
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Falcon Invoice Discounting
Falcon's Invoice Discounting: Your Path to Prosperity
Falcon's Invoice Discounting: Your Path to Prosperity
hemanthkumar470700
Power point presentation on enterprise performance management
Power point presentation on enterprise performance management
VaishnaviGunji
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Admir Softic
BeMetals Investor Presentation_May 3, 2024.pdf
BeMetals Investor Presentation_May 3, 2024.pdf
DerekIwanaka1
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
Eric T. Tung
Over the Top (OTT) Market Size & Growth Outlook 2024-2030
Over the Top (OTT) Market Size & Growth Outlook 2024-2030
tarushabhavsar
Falcon Invoice Discounting: Unlock Your Business Potential
Falcon Invoice Discounting: Unlock Your Business Potential
Falcon investment
Buy Verified TransferWise Accounts From Seosmmearth
Buy Verified TransferWise Accounts From Seosmmearth
Buy Verified Binance Account
Escorts in Nungambakkam Phone 8250092165 Enjoy 24/7 Escort Service Enjoy Your...
Escorts in Nungambakkam Phone 8250092165 Enjoy 24/7 Escort Service Enjoy Your...
meghakumariji156
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
gargpaaro
Falcon Invoice Discounting: Tailored Financial Wings
Falcon Invoice Discounting: Tailored Financial Wings
Falcon Invoice Discounting
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon investment
HomeRoots Pitch Deck | Investor Insights | April 2024
HomeRoots Pitch Deck | Investor Insights | April 2024
Hector Del Castillo, CPM, CPMM
Buy gmail accounts.pdf buy Old Gmail Accounts
Buy gmail accounts.pdf buy Old Gmail Accounts
Buy Verified Cash App Account
Arti Languages Pre Seed Teaser Deck 2024.pdf
Arti Languages Pre Seed Teaser Deck 2024.pdf
will854175
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Adnet Communications
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
IndeedSEO
Falcon Invoice Discounting: Aviate Your Cash Flow Challenges
Falcon Invoice Discounting: Aviate Your Cash Flow Challenges
hemanthkumar470700
Último
(20)
joint cost.pptx COST ACCOUNTING Sixteenth Edition ...
joint cost.pptx COST ACCOUNTING Sixteenth Edition ...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Unveiling Falcon Invoice Discounting: Leading the Way as India's Premier Bill...
Falcon's Invoice Discounting: Your Path to Prosperity
Falcon's Invoice Discounting: Your Path to Prosperity
Power point presentation on enterprise performance management
Power point presentation on enterprise performance management
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
BeMetals Investor Presentation_May 3, 2024.pdf
BeMetals Investor Presentation_May 3, 2024.pdf
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
Over the Top (OTT) Market Size & Growth Outlook 2024-2030
Over the Top (OTT) Market Size & Growth Outlook 2024-2030
Falcon Invoice Discounting: Unlock Your Business Potential
Falcon Invoice Discounting: Unlock Your Business Potential
Buy Verified TransferWise Accounts From Seosmmearth
Buy Verified TransferWise Accounts From Seosmmearth
Escorts in Nungambakkam Phone 8250092165 Enjoy 24/7 Escort Service Enjoy Your...
Escorts in Nungambakkam Phone 8250092165 Enjoy 24/7 Escort Service Enjoy Your...
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
Call 7737669865 Vadodara Call Girls Service at your Door Step Available All Time
Falcon Invoice Discounting: Tailored Financial Wings
Falcon Invoice Discounting: Tailored Financial Wings
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon Invoice Discounting: Empowering Your Business Growth
HomeRoots Pitch Deck | Investor Insights | April 2024
HomeRoots Pitch Deck | Investor Insights | April 2024
Buy gmail accounts.pdf buy Old Gmail Accounts
Buy gmail accounts.pdf buy Old Gmail Accounts
Arti Languages Pre Seed Teaser Deck 2024.pdf
Arti Languages Pre Seed Teaser Deck 2024.pdf
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
Falcon Invoice Discounting: Aviate Your Cash Flow Challenges
Falcon Invoice Discounting: Aviate Your Cash Flow Challenges
The Production Process: The Behavior of Profit Maximizing Firms
1.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair CHAPTERCHAPTER 66 Prepared by: Fernando QuijanoPrepared by: Fernando Quijano and Yvonn Quijanoand Yvonn Quijano The Production Process:The Production Process: The Behavior of Profit-The Behavior of Profit- Maximizing FirmsMaximizing Firms
2.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair ProductionProduction Central to our analysis isCentral to our analysis is productionproduction:: • ProductionProduction is the process by whichis the process by which inputs are combined, transformed,inputs are combined, transformed, and turned into outputs.and turned into outputs.
3.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair What Is AWhat Is A FirmFirm?? • AA firmfirm is an organization that comesis an organization that comes into being when a person or a group ofinto being when a person or a group of people decides to produce a good orpeople decides to produce a good or service to meet a perceived demand.service to meet a perceived demand. Most firms exist to make a profit.Most firms exist to make a profit. • Production is not limited to firms.Production is not limited to firms.
4.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Perfect CompetitionPerfect Competition • many firmsmany firms, each small relative to the, each small relative to the industry,industry, • producing virtuallyproducing virtually identical productsidentical products andand • in whichin which nono firm is large enough to havefirm is large enough to have anyany control over pricescontrol over prices.. • In perfectly competitive industries, newIn perfectly competitive industries, new competitors cancompetitors can freely enter and exitfreely enter and exit thethe market.market. Perfect competition is an industryPerfect competition is an industry structure in which there are:structure in which there are:
5.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Homogeneous ProductsHomogeneous Products • Homogeneous productsHomogeneous products areare undifferentiated products;undifferentiated products; products that are identical to, orproducts that are identical to, or indistinguishable from, oneindistinguishable from, one another.another.
6.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Competitive Firms are Price TakersCompetitive Firms are Price Takers • In a perfectly competitive market, individual firms are price-takers. This means that firms have no control over price. Price is determined by the interaction of market supply and demand.
7.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Demand Facing a Single Firm in aDemand Facing a Single Firm in a Perfectly Competitive MarketPerfectly Competitive Market • If a representative firm in a perfectly competitive market rises theIf a representative firm in a perfectly competitive market rises the price of its output above $2.45, the quantity demanded of that firm’sprice of its output above $2.45, the quantity demanded of that firm’s output will drop to zero. Each firm faces aoutput will drop to zero. Each firm faces a perfectly elastic demandperfectly elastic demand curve,curve, dd..
8.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair The Behavior ofThe Behavior of Profit-Maximizing FirmsProfit-Maximizing Firms • The three decisions that all firms mustThe three decisions that all firms must make include:make include: How much ofHow much of each input toeach input to demanddemand 3.3. WhichWhich productionproduction technology totechnology to useuse 2.2. How muchHow much output tooutput to supplysupply 1.1.
9.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Profits and Economic CostsProfits and Economic Costs • Profit (economic profit)Profit (economic profit) is the differenceis the difference between total revenue and total cost.between total revenue and total cost. • Total revenueTotal revenue is the amount received from theis the amount received from the sale of the product:sale of the product: ((qq XX PP)) • Total cost (total economic cost)Total cost (total economic cost) is the total ofis the total of 1.1. Out of pocket costs,Out of pocket costs, 2.2. Normal rate of return on capital, andNormal rate of return on capital, and 3.3. Opportunity cost of each factor of production.Opportunity cost of each factor of production.
10.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Normal Rate of ReturnNormal Rate of Return • TheThe normal rate of returnnormal rate of return is a rate ofis a rate of return on capital that is just sufficientreturn on capital that is just sufficient to keep owners and investorsto keep owners and investors satisfied.satisfied. • For relatively risk-free firms, it shouldFor relatively risk-free firms, it should be nearly the same as the interest ratebe nearly the same as the interest rate on risk-free government bonds.on risk-free government bonds.
11.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Calculating Total Revenue, Total Cost,Calculating Total Revenue, Total Cost, and Profitand Profit Initial Investment:Initial Investment: Market Interest Rate Available:Market Interest Rate Available: $20,000$20,000 .10 or 10%.10 or 10% Total Revenue (3,000 belts x $10 each)Total Revenue (3,000 belts x $10 each) $30,000$30,000 CostsCosts Belts from supplierBelts from supplier $15,000$15,000 Labor CostLabor Cost 14,00014,000 Normal return/opportunity cost of capital ($20,000 x .10)Normal return/opportunity cost of capital ($20,000 x .10) 2,0002,000 Total CostTotal Cost $31,000$31,000 Profit = total revenueProfit = total revenue −− total costtotal cost −− $ 1,000$ 1,000aa aa There is a loss of $1,000.There is a loss of $1,000.
12.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Short-Run Versus Long-Run DecisionsShort-Run Versus Long-Run Decisions • TheThe short runshort run is a period of timeis a period of time for which two conditions hold:for which two conditions hold: 1.1. The firm is operating under a fixedThe firm is operating under a fixed scale (fixed factor) of production, andscale (fixed factor) of production, and 2.2. Firms can neither enter nor exit anFirms can neither enter nor exit an industry.industry.
13.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Short-Run Versus Long-Run DecisionsShort-Run Versus Long-Run Decisions • TheThe long runlong run is a period of timeis a period of time for which there are no fixedfor which there are no fixed factors of production. Firms canfactors of production. Firms can increase or decrease scale ofincrease or decrease scale of operation, and new firms canoperation, and new firms can enter and existing firms can exitenter and existing firms can exit the industry.the industry.
14.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Determining the Optimal MethodDetermining the Optimal Method of Productionof Production Price of outputPrice of output Production techniquesProduction techniques Input pricesInput prices DeterminesDetermines total revenuetotal revenue Determine total cost andDetermine total cost and optimal method ofoptimal method of productionproduction Total revenueTotal revenue −− Total cost with optimal methodTotal cost with optimal method =Total profit=Total profit • TheThe optimal method of productionoptimal method of production is theis the method that minimizes cost.method that minimizes cost.
15.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair The Production ProcessThe Production Process • Production technologyProduction technology refers to therefers to the quantitative relationship between inputsquantitative relationship between inputs and outputs.and outputs. • AA labor-intensive technologylabor-intensive technology reliesrelies heavily on human labor instead ofheavily on human labor instead of capital.capital. • AA capital-intensive technologycapital-intensive technology reliesrelies heavily on capital instead of humanheavily on capital instead of human labor.labor.
16.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair The Production FunctionThe Production Function • TheThe production functionproduction function oror total product functiontotal product function is ais a numerical or mathematicalnumerical or mathematical expression of a relationshipexpression of a relationship between inputs and outputs.between inputs and outputs. It shows units of totalIt shows units of total product as a function ofproduct as a function of units of inputs.units of inputs.
17.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Marginal Product and Average ProductMarginal Product and Average Product • Marginal productMarginal product is the additional output thatis the additional output that can be produced by adding one more unit of acan be produced by adding one more unit of a specific input,specific input, ceteris paribusceteris paribus.. • Average productAverage product is the average amountis the average amount produced by each unit of a variable factor ofproduced by each unit of a variable factor of production.production. a v e r a g e p r o d u c t o f l a b o r = t o t a l p r o d u c t t o t a l u n i t s o f l a b o r m a r g i n a l p r o d u c t o f l a b o r = c h a n g e i n t o t a l p r o d u c t c h a n g e i n u n i t s o f l a b o r u s e d
18.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair The Law of DiminishingThe Law of Diminishing Marginal ReturnsMarginal Returns • TheThe law of diminishinglaw of diminishing marginal returnsmarginal returns statesstates that:that: When additional units of aWhen additional units of a variable input are added tovariable input are added to fixed inputs, the marginalfixed inputs, the marginal product of the variable inputproduct of the variable input declines.declines.
19.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Production Function for SandwichesProduction Function for Sandwiches Production FunctionProduction Function (1)(1) LABOR UNITSLABOR UNITS (EMPLOYEES)(EMPLOYEES) (2)(2) TOTAL PRODUCTTOTAL PRODUCT (SANDWICHES(SANDWICHES PER HOUR)PER HOUR) (3)(3) MARGINALMARGINAL PRODUCT OFPRODUCT OF LABORLABOR (4)(4) AVERAGEAVERAGE PRODUCTPRODUCT OF LABOROF LABOR 00 00 −− −− 11 1010 1010 10.010.0 22 2525 1515 12.512.5 33 3535 1010 11.711.7 44 4040 55 10.010.0 55 4242 22 8.48.4 66 4242 00 7.07.0 0 5 10 15 20 25 30 35 40 45 0 1 2 3 4 5 6 7 Number of employees Totalproduct 0 5 10 15 0 1 2 3 4 5 6 7 Number of employees MarginalProduct
20.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Total, Average, and Marginal ProductTotal, Average, and Marginal Product • Marginal product is the slopeMarginal product is the slope of the total product function.of the total product function. • At point C, total product isAt point C, total product is maximum, the slope of themaximum, the slope of the total product function is zero,total product function is zero, and marginal productand marginal product intersects the horizontal axis.intersects the horizontal axis. • At point A, the slope of theAt point A, the slope of the total product function istotal product function is highest; thus, marginal producthighest; thus, marginal product is highest.is highest.
21.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Total, Average, and Marginal ProductTotal, Average, and Marginal Product • When a ray drawn from theWhen a ray drawn from the origin falls tangent to the totalorigin falls tangent to the total product function, averageproduct function, average product is maximum and equalproduct is maximum and equal to marginal product.to marginal product. • Then, average product falls toThen, average product falls to the left and right of point B.the left and right of point B.
22.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Total, Average, and Marginal ProductTotal, Average, and Marginal Product • As long as marginal productAs long as marginal product rises, average product rises.rises, average product rises. • When average product isWhen average product is maximum, marginal productmaximum, marginal product equals average product.equals average product. • When average product falls,When average product falls, marginal product is less thanmarginal product is less than average product.average product.
23.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Production Functions with Two VariableProduction Functions with Two Variable Factors of ProductionFactors of Production • In many production processes, inputs workIn many production processes, inputs work together and are viewed as complementary.together and are viewed as complementary. • For example, increases in capital usage lead toFor example, increases in capital usage lead to increases in the productivity of labor.increases in the productivity of labor. Inputs Required to Produce 100 DiapersInputs Required to Produce 100 Diapers Using Alternative TechnologiesUsing Alternative Technologies TECHNOLOGYTECHNOLOGY UNITS OFUNITS OF CAPITAL (K)CAPITAL (K) UNITS OFUNITS OF LABOR (L)LABOR (L) AA 22 1010 BB 33 66 CC 44 44 DD 66 33 EE 1010 22 • Given the technologies available, the cost-minimizing choice depends on input prices.
24.
© 2002 Prentice
Hall Business Publishing© 2002 Prentice Hall Business Publishing Principles of Economics, 6/ePrinciples of Economics, 6/e Karl Case, Ray FairKarl Case, Ray Fair Production Functions with Two VariableProduction Functions with Two Variable Factors of ProductionFactors of Production Cost-Minimizing Choice Among AlternativeCost-Minimizing Choice Among Alternative Technologies (100 Diapers)Technologies (100 Diapers) (1)(1) TECHNOLOGYTECHNOLOGY (2)(2) UNITS OFUNITS OF CAPITAL (K)CAPITAL (K) (3)(3) UNITS OFUNITS OF LABORLABOR (4)(4) COST WHENCOST WHEN PPLL = $1 P= $1 PKK = $1= $1 (5)(5) COST WHENCOST WHEN PPLL = $1 P= $1 PKK = $1= $1 AA 22 1010 $12$12 $52$52 BB 33 66 99 3333 CC 44 44 88 2424 DD 66 33 99 2121 EE 1010 22 1212 2020
Descargar ahora