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Title: Costs are very important not only to us as individual consumers, but also to businesses who must con Post by: Catracho on Jan 4, 2019 Costs are very important not only to us as individual consumers, but also to businesses who must control costs in make the desired profit. We should have learned that in this chapter (if we did not already know that). In this discussion answer the following questions (and support your answer(s)): What can cause a firm's cost curves to shift up or down? How would a shift of the
cost curves affect a firm's profits? Title: Re: Costs are very important not only to us as individual consumers, but also to businesses who must Post by: biolove on Jan 4, 2019 Cost curves shift in response to changes in two factors:
Technology and Prices of factors of production A technological change that increases productivity shifts the product curves upward and the cost curves downward. If a technological change results in the firm using more capital, the average fixed cost curve shifts upward and at low levels of output, the average total cost curve may shift upward. At large output levels, average total cost decreases. An increase in the price of a factor of production increases costs and shifts the cost curves upward. An increase in fixed cost does not affect the variable cost or marginal cost curves. An increase in variable cost does not affect the fixed cost curves. The total cost curves are affected by a price change for any factor of production. The lower your production cost, the higher your profit, or the amount you have left over after you subtract your expenses from your sales revenue. However, low production costs do not necessarily guarantee a high profit. A business may have unsustainably high fixed costs, such as rent, or may cut production costs to the point where you're producing an inferior product that nobody wants. Title: Re: Costs are very important not only to us as individual consumers, but also to businesses who must ... Post by: bio_man on Jan 6, 2019 Hi Catracho (https://biology-forums.com/index.php?action=profile;u=825455)
This should help some! It touches on what biolove wrote and more |