Lecture 16: Cost Curves
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13 Terms
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TOPIC 1: Short run cost curves
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What two components go into modeling SRTC?
recall that SRTC= rK* + wL= SRFC + SRVC
SRFC and SRVC are the two components considered
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SRFC curve
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SRVC curve and what curve does it relate to?
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SRTC curve
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Marginal Cost and Equations
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TOPIC 2: Deriving Average Cost Curves from Regular Cost Curves
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Deriving SRAFC from SRFC
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Deriving SRAVC from SRVC
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Deriving STATC from SRTC and some notes on the relations hunt between SRATC and SRAVC.
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TOPIC 3: Long Run Cost Curves
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General Rule of LRTC Curves
in the SR there are different SRTC for each possible level of K. LRTC is the lowest of all possible SRTCs for each level of q.
LRTC is the “lower envelope” of all SRTC curves
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LRTC curve and LRATC curve
