Purchase Solution

Microeconomics

Not what you're looking for?

Ask Custom Question

Please describe the origins of cost curves in words and pictures.

Purchase this Solution

Solution Summary

The expert describes the origins of cost curves in words and pictures.

Solution Preview

Please see the attached file.

Let's assume perfect competition. This is usually where we start in microeconomics. We talk about cost curves for a typical firm. In other words with perfect competition each firm has this same set of cost curves. We know that costs increase the more output that firms produce. We look at cost curves to help us understand how firms maximize profits. The profit function is
Profit = Total Revenue - Total Cost.
We know total revenue is just whatever the market price is times how ever much we sell. The other part of the profit function is about costs. That's why we are interested in cost curves. Ultimately the firms solves an ...

Purchase this Solution


Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.