Variable Unit Costs

Influence of Variable Unit Costs on a Firm's Price and Output Decisions

Fixed vs. Variable Costs

Principle of Increasing Total Costs

Marginal Cost

Further Reading on Costs: Stigler's 'The Theory of Price'

Economies of Scope

Activity: Analysis of a Total Cost Function

Modeling Quantity as a Continuous Variable for Cost Analysis Using Calculus

A manufacturing firm's total cost (C) to produce a quantity (Q) of items is represented by the function C(Q) = 5,000 + 20Q + 0.5Q². Based only on the structure of this function, what can be determined about the firm's costs?

Analyzing a New Business's Costs

Relationship Between Output and Total Costs

Strategic Analysis of Cost Structures

Match each description of a cost behavior with the corresponding mathematical representation in a firm's total cost function, C(Q), where Q is the quantity of output.

Statement: A firm's total cost to produce a quantity (Q) of a good is described by the function C(Q) = 1000 - 5Q + 0.1Q². This function is a plausible representation of a firm's total costs for all possible positive levels of output (Q > 0).

Interpreting a Firm's Cost Function

A company's total production cost is described by the function C(Q) = 15,000 + 75Q, where Q is the number of units produced. The total expenditure required by the company even if it produces zero units (Q=0) is $____.

Production Technology Choice Analysis

Importance of the Cost Function for a Firm's Output and Pricing Decisions

Constant Unit Cost and Constant Returns to Scale

Modeling Assumption of Constant Unit Cost for Apple Cinnamon Cheerios

Average Cost