economics

[sidra yaseen]

Q: derive the short run cost curves and explain the relationship between the average otal cost, average variable cost, and marginal cost curves . using these curves , derive the short run supply curve of the firm under perfect competiton ?

PLEASE ANYONE TELL ME THE ANSWER OF THIS QUESTION I WILL BE VERY THANKFUL TO YOU
THANKING YOU

[Amna]

Originally Posted by sidra yaseen

Q: derive the short run cost curves and explain the relationship between the average otal cost, average variable cost, and marginal cost curves . using these curves , derive the short run supply curve of the firm under perfect competiton ?

PLEASE ANYONE TELL ME THE ANSWER OF THIS QUESTION I WILL BE VERY THANKFUL TO YOU
THANKING YOU

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[samia fakhar]

Originally Posted by sidra yaseen

Q: derive the short run cost curves and explain the relationship between the average otal cost, average variable cost, and marginal cost curves . using these curves , derive the short run supply curve of the firm under perfect competiton ?

PLEASE ANYONE TELL ME THE ANSWER OF THIS QUESTION I WILL BE VERY THANKFUL TO YOU
THANKING YOU

it is very common topic of economics. it is better to consult any good book of micro economics related with firm behaviour. you can consult K.K. Dewet

[uzma rana]

sidra you can easily find the answer of this question in any graduate level economics book...

[Toru]

Originally Posted by samia fakhar

it is very common topic of economics. it is better to consult any good book of micro economics related with firm behaviour. you can consult K.K. Dewet

Q: Derive the short run cost curves and explain the relationship between the average total cost, average variable cost and marginal cost curves . using these curves , derive the short run supply curve of the firm under perfect competition?

Dear Sidra,

It will not be possible to lay down the derivation and description (both algebraic and diagrammatically) of the cost curves, how ever I shall be glad to offer my help to you with regard to the second part of the question.

TC: Total Cost
MC: Marginal Cost
ATC: Average Total Cost
AFC: Average Fixed Cost
AVC: Average Variable Cost


TC = FC + VC
ATC = AFC + AVC
MC = Derivative of TC (or TC')


ATC is a sum of AFC and AVC as explained above. Both the curves (ATC and AVC) are parabolas that converge (but never meet at a single point) with the increase in number/quantity of units (which we normally denote on the x-axis or horizontal axis). This is because Fixed cost is paid only once (irrespective of how much is produced) but variable cost is paid over time since it depends directly on the quantity of goods produced, hence, the convergence.

Marginal cost is a simple derivative of the TC, and cuts the ATC curve from under at its minimum point (deepest) (which is U-shaped). You should remember that ATC will keep on falling (persist to be downward sloping) as long as MC is lesser than ATC. When MC is greater than ATC, this will lead to a rise in it's slope. This explains it's U-shape factor.

Now for the supply curve. You should remember that the supply curve is actually the portion of MC curve above the ATC curve Therefore, drawing a Perfectly Competitive market structure would mean supply curve would originate from the minimum of ATC, where MC cuts the former and above.

[Aser]

Sida you can get your answer from the "Principles of Economics" in syllabus of B.com

[Mary Chan]

Salam to everyone...
i live in Oman and here i can't find books related to my subjects..
please if anyone have any notes or books in soft copy then please send me my id is in my profile..
i will be very thankful to all....
help is badly needed..