Chapter twenty Cost Minimization 成本最小化
Chapter Twenty Cost Minimization 成本最小化
Structure o The cost minimization problem ◆ Average costs e Returns to scale and total and average costs o Short run and long run costs
Structure uThe cost minimization problem uAverage costs uReturns to scale and total and average costs uShort run and long run costs
Cost minimization cA firm is a cost -minimizer if it produces any given output level y 20 at smallest possible total cost. cly)denotes the firm's smallest possible total cost for producing y units of output ocl) is the firm's total cost function (总成本函数)
Cost Minimization uA firm is a cost-minimizer if it produces any given output level y ³ 0 at smallest possible total cost. uc(y) denotes the firm’s smallest possible total cost for producing y units of output. uc(y) is the firm’s total cost function （总成本函数）
Cost minimization When the firm faces given input prices w= W1, W2,, wn) the total cost function will be written as y
Cost Minimization uWhen 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 e Consider a firm using two inputs to make one output The production function is y f(xi x2) ◆ Take the output level y≥0 as glven 4 Given the input prices W, and w2, the cost of an input bundle(x1, x2)is W1X1+ W2X2
The Cost-Minimization Problem uConsider a firm using two inputs to make one output. uThe production function is y = f(x1 ,x2 ). uTake the output level y ³ 0 as given. uGiven the input prices w1 and w2 , the cost of an input bundle (x1 ,x2 ) is w1x1 + w2x2