ChapterFour4.14.2ProductionChapterFour4.14.2Production4.3Cost4.3Cost4.3.1Characteristicsof4.3Cost4.3.1Characteristicsof4.3.2FromCostMinimizationtotheCost4.3.3CostFunctionsIntheShort4.3.4CostFunctionsIntheLong4.3.4CostFunctionsIntheLong4.3.4CostFunctionsIntheLong1.2.Long-RunTotalCostAnGraphicAnAlgebraic3.Long-RunAverageCost4.Long-RunMarginalCost5.WhyisLAC“U”4.3.4CostFunctionsIntheLong4.3.4CostFunctionsIntheLong1.2.Long-RunTotalCostAnGraphicAnAlgebraic3.Long-RunAverageCost4.Long-RunMarginalCost5.WhyisLAC“U”Introduction:LongRun IntheIntroduction:LongRun Inthelongruntherearenofixedfactorsof Firmcanfreelyadjust Productioncostsarelowerinthelong InordertodistinguishtheLong-runandshort-runcost,werewritethetermofthecosts:IntheLong-RunCost:IntheShort-Introduction:Long-RunLong-runcostisthecostofproductionwhenafirmusestheeconomicallyIntroduction:Long-RunLong-runcostisthecostofproductionwhenafirmusestheeconomicallyefficientquantitiesoflaborandcapital.ExplaintherelationshipbetweenaoutputandcostsinthelongDeriveandexplainafirm’slong-runtotalcostcurve,long-runaveragecostcurveandLong-runmarginalcostcurve.Introduction:LTCandThelong-runtotalcost(LTC)istheminimumtotalcostofproductioninthelongrunwhenafirmisperfectlyflexibleinitschoiceofIntroduction:LTCandThelong-runtotalcost(LTC)istheminimumtotalcostofproductioninthelongrunwhenafirmisperfectlyflexibleinitschoiceofinputsandcanchooseaproductionfacilityofanysize.Thelong-runaveragecostofproduction(LAC)isthelong-runtotalcostdividedbythe4.3.4CostFunctionsIntheLong4.3.4CostFunctionsIntheLong1.2.Long-RunTotalCostAnGraphicAnAlgebraic3.Long-RunAverageCost4.Long-RunMarginalCost5.WhyisLAC“U”FromExpansionPathtoLong-RunTotalCostFromExpansionPathtoLong-RunTotalCostHowtogetLTCforSTCHowtogetLTCforSTCbygraphicLTCcurveistheenvelopeofLTCcurveistheenvelopeoftheSTCSupposethefirmwishestoproduceq1,intheshortrun,someinputsarefixed,andthispreventthefirmfromproducingq1atthelowestpossiblecost.Theremaybetoomuchortoolittleofthefixedfactors.Onlyintheveryspecialcaseofjusttherightlevelofthefixedinputswouldcostbeatthelowestlevelpossible.LTCcurveistheenvelopeofLTCcurveistheenvelopeoftheSTCThelowestlevelofcostpossibleforproducingq1ispreciselythelong-runcost,asinthelongrun,thefirmcanvaryallfactorstominimizeSotheLTCmustalwaysbenolargerthanLTCisalwaysbelowtheSTCcurvesateverylevelofoutput.EachSTCcurvejusttouchestheLTCatatleastonepoint.LTCcurveistheenvelopeofLTCcurveistheenvelopeoftheSTCAteachlevelofq,thereisacheapestwayofproducingthatoutputinthelongrun.ThuseachpointontheLTCcoincideswithapointonsomeSTCs.LTCcurveistheenvelopeoftheSTCSummary:LTCisthe‘envelope’ofTheSummary:LTCisthe‘envelope’ofThelong-runtotalcost(LTC)istheminimumtotalcostofproductioninthelongrunwhenafirmisperfectlyflexibleinitschoiceofinputs.LTCisasetofmin.STCatanygivenSoLTCisoftenreferredtoasbeingHowtogetLTCfromSTCs?AnAlgebraicInHowtogetLTCfromSTCs?AnAlgebraicInthelongrun,allinputsarevariable,andscaleproductioncanqf(x1,x2,kShort-runcostfunctionSTCw1x1w2x2(kHoldingw1,w2constant,wecanSTCC(q,k)(kHowtogetLTCfromCC(q,k)HowtogetLTCfromCC(q,k)(k)G(C,q,k)ThepartialderivativeofG(C,q,k)G(C,q,k)G(C,q,k)kkk(q)WecanPutk=k(q)intoAnSupposeAgroupofSTCisshowedAnSupposeAgroupofSTCisshowedbythefollowingformCWhatiskLTC0.95q24.3.4CostFunctionsIntheLong4.3.4CostFunctionsIntheLong1.2.Long-RunTotalCostAnGraphicAnAlgebraic3.Long-RunAverageCost4.Long-RunMarginalCost5.WhyisLAC“U”HowtogetTheLong-RunAverageCostHowtogetTheLong-RunAverageCostThelong-runaveragetotalcostcurveisderivedfromtheshort-runaveragetotalcostThesegmentoftheshort-runaveragetotalcostcurvesalongwhichaveragetotalcostisthelowestmakeupthelong-runaveragetotalcostcurve.Short-RunCostsofFourDifferentShort-RunCostsofFourDifferentLong-RunAverageCostLong-RunAverageCostHowtogetC???0qqqq123HowtogetC???0qqqq1234.3.4CostFunctionsIntheLong4.3.4CostFunctionsIntheLong1.2.Long-RunTotalCostAnGraphicAnAlgebraic3.Long-RunAverageCost4.Long-RunMarginalCost5.WhyisLAC“U”HowtogetHowtoget4.3.4CostFunctionsIntheLong4.3.4CostFunctionsIntheLong1.2.Long-RunTotalCostAnGraphicAnAlgebraic3.Long-RunAverageCost4.Long-RunMarginalCost5.WhyisLAC“U”WhyisLAC“U”InWhyisLAC“U”Inthelong-Firmsexperienceincreasinganddecreasingreturnstoscaleandthereforelong-runaveragecostis“U”ReturnstoscaleandlongrunaverageEconomiesReturnstoscaleandlongrunaverageEconomiesofscale(規(guī)模經(jīng)濟(jì)acostfunctionexhibitseconomiesofscaleifaveragecostfallsasoutputexpandsDiseconomiesofscale（規(guī)模不經(jīng)濟(jì)acostfunctiondiseconomiesofifaveragecostremainsincreasesasoutputReasonsforEconomiesofSpecialisationofReasonsforEconomiesofSpecialisationoflabourandIndivisibilities(不可分割inplantTransportandstorageBulkpurchaseofLowerborrowing（借款）DiseconomiesofAfirmexperiencesdiseconomiesDiseconomiesofAfirmexperiencesdiseconomiesofscalewhenanincreaseinoutputleadstoanincreaseinlong-runaveragecost—theLACcurvebecomespositivelysloped.ReasonsforDiseconomiesofPlantsizeReasonsforDiseconomiesofPlantsizetoobigtoMaximumtechnicalsizeofplantOrganisationtooInputpricesmayriseduetoLabourrelationsdeteriorate（惡化MinimumEfficientTheminimumefficientscaleMinimumEfficientTheminimumefficientscaledescribestheoutputatwhichthelong-runaveragecostcurvebecomeshorizontal.Oncetheminimumefficientscalehasbeenreached,anincreaseinoutputnolongerdecreasesthelong-runaveragecost.Efficient0qq*=Efficient0qq*=OutputElasticityofTotalOutputElasticityofTotalEc=percentchangeinOutputElasticityofTotalOutputElasticityofTotalEc=percentchangeincostfroma1%increaseinqqc EMeasuringEconomiesofTherefore,thefollowingisEC<1:MeasuringEconomiesofTherefore,thefollowingisEC<1:LMC<economiesofEC=1:LMC=EfficientLACwillLACwillbeinMESconstanteconomiesofEC>1:LMC>LACwilldiseconomiesofWhentheproductionfunctionexhibitsincreasingreturnstoscale,thelongrunaveragecostfunctionexhibitseconomiesofscalesothatLAC(Q)decreaseswithQ.Whentheproductionfunctionexhibitsincreasingreturnstoscale,thelongrunaveragecostfunctionexhibitseconomiesofscalesothatLAC(Q)decreaseswithQ.Whentheproductionfunctionexhibitsdecreasingreturnstoscale,theWhentheproductionfunctionexhibitsdecreasingreturnstoscale,thelongrunaveragecostfunctionexhibitsdiseconomiesofscalesothatLAC(Q)increaseswithQ.Whentheproductionfunctionexhibitsconstantreturnstoscale,thelongrunaveragecostfunctionisflat:itneitherincreasesnordecreaseswithoutput.Long-RunCostwithConstantReturnsto($perunitofoutput)Long-RunCostwithConstantReturnsto($perunitofoutput) Long-RunCostwithEconomiesandDiseconomiesof($perunitofoutputALong-RunCostwithEconomiesandDiseconomiesof($perunitofoutputAB3LearningEffectandL勞每動批投產(chǎn)入品量的LXCumulativeoutputOutputLearningEffectandL勞每動批投產(chǎn)入品量的LXCumulativeoutputOutputper(outputperperiodEffect(學(xué)習(xí)效應(yīng)LABNIfEffect(