6 Costs

An economist is a person who, when invited to give a talk at a banquet, tells the audience “There’s no such thing as a free lunch.”

Learning Objectives

  1. Show how to make managerial decisions using the opportunity cost concept.

  2. Draw marginal cost, average cost, and other cost curves.

  3. Determine how to choose inputs to minimize the cost of producing a given quantity.

  4. Predict how experience-based learning reduces costs.

  5. Determine when it pays to produce two goods simultaneously.

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