cost & economies (1).pptx
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1. The document discusses various concepts related to economics costs including opportunity cost, explicit costs, implicit costs, fixed costs, variable costs, average costs, marginal costs, economies and diseconomies of scale. 2. It provides examples of costs like purchase cost, installation charges, maintenance charges for a machine. Common and traceable costs as well as historical and replacement costs are also mentioned. 3. Tables showing total costs, fixed costs, variable costs, average costs, and marginal costs at different output levels for firms are included.
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2) It examines costs in the short run, including total, fixed, and variable costs. It provides an example of how these costs change with output for a company.
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The document discusses different types of costs including:
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Business Canvas and SWOT Analysis
*For more detailed information see TVP2.0*
Key Partners
Rhode Island Fight
Club direct
customer
information line:
(401)316-5779.
National Food
Truck Festival
information line:
(617)254-9500.
Owners and
master brewers. Ex.
Startline Brewery,
Wormtown
Brewery, and
Treehouse Brewery.
Key Activities
Providence Festival
contact.
Reach out to
brewery owners
and gain interest.
Value Proposition
Food Truck Festival
networking.
Microbrewery
sponsorship event.
Logo exposure via
Rhode Island Food
Fight Coupons.
3rd Annual
Providence Food
Truck & Craft Beer
Festival in
Providence, RI on
August 5th, 2018.
Customer
Relationships
Entrepreneurial
Partnerships.
Target market
focuses on
transparent
professional
environments.
Customer Segments
Local college
students.
New restaurants in
the region.
Brewery’s and
Food Truck owners.
Commercial
Customers.
Immigration heavy
regions for focus
on building kitchen
staff database.
Key Resources
Respect for brand.
Strong virtual
infrastructure for
potential
consumers.
Leverage existing
entrepreneurial
relationships.
Channels
Communication
Channel: Web and
Application based.
Public Relations
Channels: Social
Media presence.
Create a hashtag
targeted towards
worker base.
Cost Structure
Highest Key Activity Cost – Rhode Island Food Fight logo
exposure via purchased space on their coupons.
The Food and Craft Beer Festival and Microbrewery’s requires
minimal costs and focus on a mutually beneficial agreement
based on the benefit of brand exposure.
Revenue Streams
Increased revenue can be seen via networking exposure.
Becoming involved in popular events for the target market is a
low cost, high profit venture.
Results could be measured with the App with a small
modification to the software.
Business Canvas and SWOT Analysis
*For more detailed information see TVP2.0*
Strengths
Affordable and convenient
Current northeast American culture
(Immediate Satisfaction)
Dual benefits for employees and employers
Experience in the restaurant industry
Knowledge of the needs
First-Mover Advantage
Weaknesses
Customer retention: Restaurant owners are
continuously cancelling and reinstating their
subscriptions
Low employee/worker database
Low consumer awareness
Little social media presence
S.W.O.T. Analysis
Opportunities
Microbrewery’s are popular among the target
market
College campuses (population of 2 million)
Social Media movements
Food Truck Festivals are an ideal way of
connecting with possible employers and food
lovers.
Threats
Loss of Momentum
Piggy backers
Economic fluctuations
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The document discusses different types of costs including:
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2. In the short-run, costs are classified as fixed, variable, total, average fixed, average variable, and marginal based on their relationship to changing output levels.
3. In the long-run, all factors are variable and long-run total, average, and marginal cost curves are defined based on minimum cost production at different output scales.
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The document discusses cost theory concepts including opportunity costs, explicit and implicit costs, short-run and long-run costs, fixed and variable costs, total cost, average cost, and marginal cost. It explains how average, marginal, and total costs are related and how their curves are shaped. Specifically, it summarizes that marginal cost and short-run average cost curves slope upward due to diminishing returns, while the long-run average cost curve is U-shaped as economies of scale initially lower costs but diseconomies later raise them. The envelope relationship shows that short-run average costs are always above the minimum long-run average cost.
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The document discusses different theories of cost, including traditional and modern theories. Under traditional theory, costs are categorized as total, average, and marginal in both the short-run and long-run. Total cost equals total fixed cost plus total variable cost. Average cost depends on average fixed and average variable cost. Marginal cost is the change in total cost from producing one additional unit. In the long-run, all costs are variable. Modern theory proposes cost curves are L-shaped rather than U-shaped as traditionally thought.
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1. The document discusses various costs associated with operating a business including rent, employee salaries, electricity bills, equipment costs, raw materials, loans and interest, sales and profits.
2. It defines different types of costs such as money/nominal costs, explicit costs, and implicit costs. Money costs include expenses like depreciation and materials. Explicit costs are purchases from the market while implicit costs use self-owned inputs like an owner's salary.
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This document is a project submission on microeconomics by Chanchal Saharma, a first year BBA student. It contains an introduction and contents section listing the main topics: cost, the relationship between total cost, variable cost and fixed cost, the relationship between average cost and marginal cost, and revenue. It then provides details on each topic in separate sections, defining key terms and concepts and illustrating relationships between costs and revenues with tables and graphs.
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The document discusses the costs of production for a firm. It defines fixed costs as costs that do not vary with output, variable costs as costs that vary with output, and total costs as the sum of fixed and variable costs. Marginal cost is defined as the change in total cost from producing one additional unit of output. In the short run, costs are classified as either fixed or variable, but in the long run most costs can become variable. Cost curves like average total cost, average variable cost, and marginal cost are discussed and how they relate to costs and production levels.
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This document discusses different types of costs including explicit, implicit, accounting, economic, replacement, fixed, variable, incremental, sunk, total, average, and marginal costs. It also covers cost concepts like total cost, average cost, marginal cost curves. Other topics covered include short run and long run costs, economies and diseconomies of scale, learning curves, and break-even analysis. Key cost relationships and cost minimization are also summarized.
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The document discusses the costs of production for firms. It defines different types of costs including fixed costs, variable costs, total costs, average costs, and marginal costs. Fixed costs remain constant regardless of the amount of output, while variable costs change with output. Total cost is the sum of fixed and variable costs. The document also discusses how cost curves like total cost, average cost, and marginal cost shift when costs or technology change.
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The document describes costs for three firms over different quantities of output.
Firm A experiences economies of scale as its long-run average cost continuously declines as output increases. Economies of scale occur when output increases by a greater proportion than inputs, so that average costs fall with scale.
Diseconomies of scale happen when output rises less than inputs, causing average costs to increase with scale. Firm A is the only one that sees LRAC decline throughout, indicating it benefits from economies of scale.
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The document discusses different types of costs in production including:
1. Cost of production refers to the total expenses incurred to produce a commodity, including costs of inputs, labor, technology, and efficiency.
2. Money costs include expenses like materials, wages, machinery, depreciation, interest, and profit. Real costs refer to the efforts and sacrifices of producers.
3. Opportunity cost is the next best alternative forgone in producing a good. For a farmer, it is the output of potatoes not produced by using resources for wheat.
Cost oncept
The document provides an overview of cost concepts that will be covered in Chapter 8. It defines different types of costs including accounting costs, opportunity costs, fixed costs, and variable costs. It explains the concepts of average cost, marginal cost, and their relationships. It discusses costs in the short run versus the long run and how all costs are variable in the long run. It also covers costs for multi-product firms and the allocation of common costs for joint products. Finally, it introduces the linkages between costs, revenue, and output through concepts like total revenue, average revenue, and marginal revenue.
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1. The document discusses various cost concepts including opportunity cost, outlay cost, total cost, average cost, marginal cost, fixed cost, and variable cost. It explains these concepts for both the short run and long run.
2. In the short run, total cost is the sum of total fixed cost and total variable cost. Average cost and marginal cost are calculated based on changes in total cost and output.
3. In the long run, all inputs are variable and firms can change the size of their plant and operations. Long run average cost is determined by the minimum points of a series of short run average cost curves.
Production And Cost In The Short Run
The document discusses different types of costs firms face in both the short run and long run. It defines explicit costs as actual cash payments and implicit costs as opportunity costs. In the short run, some resources are fixed while others are variable. As more of the variable input is added, marginal product initially increases but eventually declines due to diminishing returns. In the long run, all inputs are variable and firms can choose different plant sizes, leading to economies or diseconomies of scale.
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The document discusses theories of costs in the short run and long run for firms. In the short run, costs are classified as fixed or variable. Fixed costs do not change with output while variable costs do change with output. In the long run, nothing is fixed. Long run average cost (LRAC) curves illustrate average costs when all factors of production can be varied. LRAC curves are U-shaped and reflect economies of scale at low outputs and diseconomies of scale at high outputs. LRAC curves envelop multiple short run average cost curves as firms choose the optimal factory size.
Cost 3
This document discusses theories of costs in the short run and long run for firms. It defines fixed costs as expenses that do not change with output, and variable costs as expenses that change proportionally with output. In the short run, total costs are the sum of fixed and variable costs. In the long run, when all costs are variable, the long run average cost curve is derived from the minimum points of multiple short run average cost curves and can exhibit economies or diseconomies of scale.
firm cost of production
1) A firm is an organization that employs resources to produce goods or services with the aim of making a profit. A firm's cost of production is the total expenditures required to produce a specific level of output.
2) Costs include explicit costs like wages that are directly paid, and implicit costs like foregone opportunity that is not directly paid. Short-run costs are divided into fixed costs that do not vary with output and variable costs that do vary.
3) Per unit costs include average fixed cost, average variable cost, average cost, and marginal cost which is the change in total cost from an additional unit of output. These concepts and cost curves are used to analyze costs of production in the short and long
F0dd9 cost
This document discusses various concepts related to cost theory and analysis. It defines different types of costs such as actual, opportunity, explicit, implicit, fixed, variable, accounting, economic, marginal, incremental, sunk, private, social, original, and replacement costs. It also discusses cost functions, the relationship between production and costs in the short-run and long-run, cost curves like total, average, and marginal costs. Finally, it covers special topics like profit contribution analysis, break-even analysis, operating leverage, learning curves, and economies of scope.
Business Canvas and SWOT Analysis For mo.docx
Business Canvas and SWOT Analysis
*For more detailed information see TVP2.0*
Key Partners
Rhode Island Fight
Club direct
customer
information line:
(401)316-5779.
National Food
Truck Festival
information line:
(617)254-9500.
Owners and
master brewers. Ex.
Startline Brewery,
Wormtown
Brewery, and
Treehouse Brewery.
Key Activities
Providence Festival
contact.
Reach out to
brewery owners
and gain interest.
Value Proposition
Food Truck Festival
networking.
Microbrewery
sponsorship event.
Logo exposure via
Rhode Island Food
Fight Coupons.
3rd Annual
Providence Food
Truck & Craft Beer
Festival in
Providence, RI on
August 5th, 2018.
Customer
Relationships
Entrepreneurial
Partnerships.
Target market
focuses on
transparent
professional
environments.
Customer Segments
Local college
students.
New restaurants in
the region.
Brewery’s and
Food Truck owners.
Commercial
Customers.
Immigration heavy
regions for focus
on building kitchen
staff database.
Key Resources
Respect for brand.
Strong virtual
infrastructure for
potential
consumers.
Leverage existing
entrepreneurial
relationships.
Channels
Communication
Channel: Web and
Application based.
Public Relations
Channels: Social
Media presence.
Create a hashtag
targeted towards
worker base.
Cost Structure
Highest Key Activity Cost – Rhode Island Food Fight logo
exposure via purchased space on their coupons.
The Food and Craft Beer Festival and Microbrewery’s requires
minimal costs and focus on a mutually beneficial agreement
based on the benefit of brand exposure.
Revenue Streams
Increased revenue can be seen via networking exposure.
Becoming involved in popular events for the target market is a
low cost, high profit venture.
Results could be measured with the App with a small
modification to the software.
Business Canvas and SWOT Analysis
*For more detailed information see TVP2.0*
Strengths
Affordable and convenient
Current northeast American culture
(Immediate Satisfaction)
Dual benefits for employees and employers
Experience in the restaurant industry
Knowledge of the needs
First-Mover Advantage
Weaknesses
Customer retention: Restaurant owners are
continuously cancelling and reinstating their
subscriptions
Low employee/worker database
Low consumer awareness
Little social media presence
S.W.O.T. Analysis
Opportunities
Microbrewery’s are popular among the target
market
College campuses (population of 2 million)
Social Media movements
Food Truck Festivals are an ideal way of
connecting with possible employers and food
lovers.
Threats
Loss of Momentum
Piggy backers
Economic fluctuations
As of now, SpinGig does not have any immediate ...
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Okay, here are the steps:
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cost & economies (1).pptx
- 1. UNIT - 3 ECONOMICS COSTS ECONOMIES AND DISECONOMIES OF SCALE
- 2. The economist’s idea of cost is based on the fact that resources are scares and have alternative uses. Thus if resources are used for the production of some commodities, then it means that the production of some alternative commodities are forgone.
- 3. OPPORTUNITY COST The cost of this choice is the benefit of the next best alternative foregone. This is called opportunity cost. This choice implies sacrifice of other alternatives. hence cost of this choice will be evaluated in terms of the sacrificed alternatives. Therefore, opportunity cost is the highest valued benefit that must be sacrificed as a result of choosing alternative.
- 5. EXPLICIT COST- OUT OF POCKET COSTS The money payment, which a firm makes to those ‘outsiders’ who supply labour services, raw materials, transport services, electricity etc. are called explicit costs
- 6. IMPLICIT COST The cost of “self owned” resources Salary of proprietor Interest on entrepreneurs own investment Rent on own land
- 7. FIXED COST & VARIABLE COST SHORT RUN & LONG RUN
- 8. SHORT RUN
- 9. AVOIDABLE AND UNAVOIDABLE COST At times a firm faces a problem of retrenchment or contraction , costs which can be avoided are called as avoidable costs and costs which cannot be avoided are called as unavoidable costs.
- 10. INCREMENTAL AND SUNK COSTS Costs which increases because of expansion of a firm are called incremental costs. Cost which have to be born whether there is expansion or not are called sunk costs
- 11. IF COMPANY WANTS TO PURCHASE A MACHINE Cost of purchase Installation charges Maintenance charges Operational charges
- 12. COMMON AND TRACEABLE COSTS
- 13. HISTORICAL AND REPLACEMENT COSTS
- 14. Total fixed costs Total variable costs Total costs = Total fixed costs + Total variable costs
- 15. AVERAGE FIXED COSTS AFC= TFC/Units of output
- 16. AVERAGE VARIABLE COSTS TVC/Units of output
- 17. TOTAL AVERAGE COSTS TOTAL AVERAGE COSTS= AFC+AVC
- 18. MARGINAL COST MC= Change in total costs/ change in output
- 19. DISECONOMIES OF SMALL SCALE PRODUCTION Expenses Labour costs Wastage No real feel of market
- 20. ECONOMIES OF SCALE Internal economies are those advantages of large production which accrue to a firm on account of its superior technique and management
- 27. DISECONOMIES OF LARGE SCALE PRODUCTION As a firm expands beyond a certain limit,it becomes unmanageable and unwieldy. Management and supervision becomes difficult Labour unions Loss of coordination ( No direct contact with customers)
- 28. Overproduction Cut throat competition
- 29. Adaptation International relations
- 30. 1 TC=100+50Q-11Q2+Q3 FIND: MC,AC & AVC PROVE THAT MC PASSESS THROUGH MINIMUM POINT OF AVC
- 31. 2 TVC=50Q-10Q2+Q3 FIND THE LEVEL OF OUTPUT WHERE MC IS A MINIMUM FIND THE LEVEL OF OUTPUT WHERE AVC IS A MINIMUM
- 32. Q TC FC VC ATC AFC AVC MC 0 125 125 0 10 175 125 50 17.5 12.5 5 20 125 10.50 6.25 30 125 110 4.16 40 255 125 3.125 50 125 2.5 60 125 2.08 3 70 125 5 1.78 80 125 295 1.56
- 33. Q TC TFC TVC AFC AVC ATC MC 0 1 200 100 100 2 290 95 3 123 4 110 71 5 420 20 84 80 6 103.8 7 751 107.28 128 8 801 9 1098 998 197 10 10 123.2
- 34. Q TC TFC TVC AFC AVC ATC MC 0 100 100 1 200 100 100 100 100 200 100 2 290 100 190 50 95 145 90 3 369 100 269 33.33 89.66 123 109 4 440 100 340 25 85 110 71 5 520 100 420 20 84 104 80 6 622.8 100 522.8 16.66 87.13 103.8 102.8 7 751 100 651 14.28 93 107.28 128 8 901 100 801 12.5 100.12 112.62 150 9 1098 100 998 11.11 110.88 122 197 10 1332 100 1232 10 123.2 133.2 234
- 35. 4. For a firm, the average cost function is estimated as AC = 100/Q + 20 + 4Q What is total variable cost for the firm at an output of 15 units?
- 36. 5. If the production function is Q = 20K 0.3 L 0.3, what is the marginal rate of technical substitution of labor for capital?
- 37. 6. Which of the following cost functions signifies a long-run cost function? a. TC = 250 + 3Q b. TC = 300 c. TC = 50 + 100Q + 2Q2 d. Both (b) and (c) e. None of the above.
- 38. 7. Mr. Subba Rao, owner of Billow Garments & Brothers, employs labor and knitting machines as inputs to produce woolen garments. The following are the marginal productivity functions of labor and capital for the firm: MPK = 0.75L0.75/K0.25 , MPL = 0.75 K0.75/L0.25 If the wage paid to the laborers is Rs.8 and the cost of capital is Rs.5 each, what is the cost minimizing proportion of L to K?
- 39. 8. The production function of a firm is Q = 250L0.5. What should be the quantity of labor that the firm should hire to maximize total profits, when price of the good is Rs.2 and wage rate is Rs.25.
- 40. 9 If the total cost function is TC = 200 – 4Q + 6Q2 and the output is 4 units, what is the marginal cost ?