This article is within the scope of WikiProject Economics, a collaborative effort to improve the coverage of
Economics on Wikipedia. If you would like to participate, please visit the project page, where you can join
the discussion and see a list of open tasks.EconomicsWikipedia:WikiProject EconomicsTemplate:WikiProject EconomicsEconomics articles
the article should note that the average cost curve shows the minimum costs of producing a given level of output. In other word the cost curve reflects the behaviorial assumption of cost minimization. Without specifying the behavioral assumption the curve a cost curve cannot be rationally derived. .
Production Functions and Cost Curves
The production function determines all cost functions. The variable cost curve is the inverted short run production function or total product curve. The total cost function is therefore the inverted total product function plus fixed costs. Because the production function determines the variable cost function it necessarily determines the marginal cost curve and the variable cost functions.
Jgard5000 (
talk) 13:24, 5 November 2009 (UTC)jgard5000
Jgard5000 (
talk)
13:24, 5 November 2009 (UTC)reply
Dubious statements
The following two statements in the section "Relationship between short run and long run cost curves" are unclear and may well be incorrect in their intent (although they have a citation):
"8. If the production function has increasing returns to scale, the minimum of the SATC curve will occur at a higher level of production than the long-run cost-minimizing level of production.[8]:292-299 Where LRTC = STC, LRATC = SATC and LRMC = SMC. SMC does not equal LRMC and LRMC does not equal LRAC."
"9. With decreasing returns the minimum of the SATC curve will be tangent to the LRAC curve at a level of production lower than the long run cost-minimizing level of production.[8]:292-299 Where LRTC = STC, LRATC = SATC and LRMC = SMC. SMC does not equal LRMC and LRMC does not equal LRAC."
Actually, with increasing (decreasing) returns to scale, there is no "long-run cost-minimizing level of production," because the long-run average cost curve is monotonically decreasing (increasing). (See references [3],[4], and [5] -- Gelles & Mitchell, Frisch, and Ferguson.)
Duoduoduo (
talk)
17:14, 1 July 2010 (UTC)reply
for any given amount of capital "that fixed amount of capital is actually cost minimzing for some level of output in the long run" Binger & Hoffman, Microeconomics with Calculus p.292.--
Jgard5000 (
talk) 11:32, 6 July 2010 (UTC)Jgard5000--
Jgard5000 (
talk) 11:32, 6 July 2010 (UTC) In other words every point on the long run average cost curve represents the "cost minimizing livel of output for a given amount of fixed capital. the curve itself is the locus of such points and this is true regardless of which segment of the curve we are considering.--
Jgard5000 (
talk) 11:37, 6 July 2010 (UTC)jgard5000--
Jgard5000 (
talk)
11:37, 6 July 2010 (UTC)reply
Maybe what you just said here should go in the article. But the first sentences in 8 and 9 seem wrong as they currently are, because e.g. 8 says that in the downward sloping region of LRAC, i.e. if the firm is operating to the left of the min point of LRAC, then the min of SATC is to the right of the min of LRAC.
Duoduoduo (
talk)
16:06, 6 July 2010 (UTC)reply
1)under what conditions in the short run can a firm earn economic profits?
2)when is economic profit possible in the long run?
3)explain how conmic pofits differ from economic rent —Preceding
unsigned comment added by
41.72.221.50 (
talk)
15:34, 26 July 2010 (UTC)reply
Proposal for merging "Long-run marginal cost" article into "Cost curve" article in a month
LRMC is the minimum increase in total cost associated with an increase of one unit of output when all inputs are variable and when input combinations are optimal before and after the change.[1] LRMC is the slope of the LR total cost function. SRMC (short-run marginal cost) = LRMC at the long run cost minimizing level of output.
^ Sexton, R; P. Graves; & Lee, D. 1993 "The Short- and Long-Run Marginal Cost Curve: A Pedagogical Note", Journal of Economic Education, v24 page 34 Win.
{{DEFAULTSORT:Long Run Marginal Cost}}
[[Category:Resources]]
[[Category:Strategic management]]
[[Category:Project management]]
{{Econ-stub}}
Copy of Revision history of Long-run marginal cost
18:49, 8 September 2010 Thomasmeeks (talk | contribs) (1,252 bytes) (Template at top for proposing that this article be merged into Cost curve; see Talk page for discussion) (undo)
08:59, 2 August 2010 Thomasmeeks (talk | contribs) m (1,211 bytes) ("Long-run" for the adjective-noun used as an adjective per Strunk & White) (undo)
08:54, 2 August 2010 Thomasmeeks (talk | contribs) m (1,181 bytes) (moved Long run marginal cost to Long-run marginal cost: both the cited source & Strunk & White hyphenating an adjective-noun used as an adjective) (undo)
03:02, 3 July 2010 Duoduoduo (talk | contribs) m (1,181 bytes) (add link) (undo)
18:46, 9 November 2009 Rich Farmbrough (talk | contribs) m (631 bytes) (remove Erik9bot category and add appropriately dated unref tag using AWB) (undo)
14:01, 1 May 2009 Rashid8928 (talk | contribs) m (441 bytes) (undo)
13:57, 1 May 2009 ClueBot (talk | contribs) m (22 bytes) (Reverting possible vandalism by Rashid8928 to version by RussBot. False positive? Report it. Thanks, ClueBot. (686762) (Bot)) (undo)
13:57, 1 May 2009 Rashid8928 (talk | contribs) m (empty) (←Blanked the page) (undo)
19:06, 27 July 2007 RussBot (talk | contribs) m (22 bytes) (Robot: Fixing double-redirect -"Long run" +"Long-run") (undo)
Copy of Revision history of Talk:Long-run marginal cost
18:40, 8 September 2010 Thomasmeeks (talk | contribs) (738 bytes) (→Proposal for merging "Long-run marginal cost" article into "Cost curve" article in a month)