andCostAnalysisPartII(M-Grow-Hill,微观经济学

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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 9
A Typical Long-Run Average Total Cost Table
Total Costs Total Cost Total Costs = Average Total Quantity of Labor of Machines TCL + TCM Costs = TC/Q
In real-world production processes, economies of scale are extremely important at low levels of production.
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
11
$381
$254
$635
$58
12
390
260
650
54
13
402
268
670
52
14
420
280
700
50
15
450
300
750
50
16
480
320
800
50
17
510
340
850
50
18
549
366
915
51
19
600
400
1,000
53
20
666
444
1,110
56
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10 - 12
Economies of Scale
An indivisible setup cost is the cost of an indivisible input for which a certain minimum amount of production must be undertaken before the input becomes economically feasible to use.
10 - 11
Economies of Scale
There are economies of scale in production when the per-unit output cost decreases as output increases when all inputs are changeable.
Diseconomies of scale occur on the right side of the graph of the long-run average cost curve where it is upward sloping, meaning that average cost is increasing.
The cost of a blast furnace or an oil refinery is an example of an indivisible setup cost.
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 13
Economies of Scale
Indivisible setup costs create many realworld economies of scale.
10 - 8
Determinants of the Shape of the Long-Run Cost Curve
The shape of the long-run cost curve is due to the existence of economies and diseconomies of scale.
10 - 6
Technical Efficiency and Economic Efficiency
The economically efficient method of production is that method that produces a given level of output at the lowest possible cost.
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 4
Making Long-Run Production Decisions
The firm makes long-run decisions on the basis of the expected costs, and expected usefulness, of inputs.
McGraw-Hill/Irwin
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 16
Economies of Scale
The minimum efficient level of production will be at the beginning of the constant returns portion of the average cost curve—where average total costs are at a minimum.
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 18
Diseconomies of Scale
Diminishing marginal productivity refers to the decline in productivity caused by increasing units of a variable input being added to a fixed input.
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Technical efficiency is efficiency that does not consider cost of inputs.
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 15
Economies of Scale
The minimum efficient level of production is the amount of production that spreads setup costs out sufficiently for firms to undertake production profitably.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 5
Technical Efficiency and Economic Efficiency
Technical efficiency is a situation in which as few inputs as possible are used to produce a given output.
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10 - 19
Diseconomies of Scale
Diseconomies of scale refer to decreases in productivity which occur when there are equal increases of all inputs (no input is fixed).
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 10
A Typical Long-Run Average Total Cost Curve
Costs per unit
$64
62
60
Average
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10 - 17
Economies of Scale
The minimum efficient level of production is reached once the size of the market expands to a size large enough so that firms can take advantage of all economies of scale.
andCostAnalysisPartII(M-Grow-Hill,微 观经济学
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
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total cost
56
Minimum efficient
54
level of production
52
50
48
11 12 13 14 15 16 17 18 19 20 Quantity
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The law of diminishing marginal productivity does not hold in the long run since all inputs are variable in the long run.
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10 - 14
Economies of Scale
Because of the importance of economies of scale, business people often talk of a minimum efficient level of production.
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It is the least-cost technically efficient process.
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
10 - 7
Determinants of the Shape of the Long-Run Cost Curve