Tài liệu tham khảo Tài liệu trung cấp môn Kinh tế vi mô bằng tiếng Anh gồm 41 phần giúp sinh viên khoa kinh tế học tốt môn Kinh tế vi mô. Tài liệu này là phần 22 giới thiệu về " Cost curves " | CHAPTER 2 1 COST CURVES In the last chapter we described the cost-minimizing behavior of a firm. Here we continue that investigation through the use of an important geometric construction the cost curve. Cost curves can be used to depict graphically the cost function of a firm and are important in studying the determination of optimal output choices. Average Costs Consider the cost function described in the last chapter. This is the function c wi W2 3 that gives the minimum cost of producing output level y when factor prices are w1 W2 . In the rest of this chapter we will take the factor prices to be fixed so that we can write cost as a function of y alone c y . Some of the costs of the firm are independent of the level of output of the firm. As we ve seen in Chapter 20 these are the fixed costs. Fixed costs are the costs that must be paid regardless of what level of output the firm produces. For example the firm might have mortgage payments that are required no matter what its level of output. 368 COST CURVES Ch 21 Other costs change when output changes these are the variable costs. The total costs of the firm can always be written as the sum of the variable costs cv y and the fixed costs F c y c y F. The average cost function measures the cost per unit of output. The average variable cost function measures the variable costs per unit of output and the average fixed cost function measures the fixed costs per unit output. By the above equation - AVC y AFC y y y y where AVC y stands for average variable costs and AFC y stands for average fixed costs. What do these functions look like The easiest one is certainly the average fixed cost function when y 0 it is infinite and as y increases the average fixed cost decreases toward zero. This is depicted in Figure . Figure Construction of the average cost curve. A The average fixed costs decrease as output is increased. B The average vari- able costs eventually increase as output is increased. C The .
