Chapter twenty Cost Minimization 成本最小化
Chapter Twenty Cost Minimization 成本最小化
Structure The cost minimization problem Average costs Returns to scale and total and average costs Short run and long run costs
Structure The cost minimization problem Average costs Returns to scale and total and average costs Short run and long run costs
Cost minimization A firm is a cost -minimizer if it produces any given output level y >0 at smallest possible total cost cly)denotes the firm's smallest possible total cost for producing y units of output cly)is the firm's total cost function 总成本函数)
Cost Minimization A firm is a cost-minimizer if it produces any given output level y 0 at smallest possible total cost. c(y) denotes the firm’s smallest possible total cost for producing y units of output. c(y) is the firm’s total cost function （ 总成本函数）
Cost minimization When the firm faces given input prices w=(Wi,W2,--,Wn) the total cost function will be written as C(W Wny)
Cost Minimization When the firm faces given input prices w = (w1 ,w2 ,…,wn ) the total cost function will be written as c(w1 ,…,wn ,y)
The Cost-Minimization problem Consider a firm using two inputs to make one output The production function is y=f(x1,x2) Take the output level y 20 as given Given the input prices W, and w2, the cost of an input bundle x1, x2 is W11+W2X2
The Cost-Minimization Problem Consider a firm using two inputs to make one output. The production function is y = f(x1 ,x2 ). Take the output level y 0 as given. Given the input prices w1 and w2 , the cost of an input bundle (x1 ,x2 ) is w1x1 + w2x2