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DECREASING RETURNS TO SCALE: A given proportionate increase in all resources in the long run results in a proportionately smaller increase in production. Decreasing returns to scale exists if a firm increases ALL resources -- labor, capital, and other inputs -- by 10%, and output increases by less than 10%. You might want to compare increasing returns to scale and constant returns to scale.
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Lesson Contents
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Unit 1: The Concept |
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Unit 2: A Little More |
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Unit 3: Measurement |
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Unit 4: A Continuum |
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Unit 5: Market Elasticity | |
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Elasticity Basics
In this lesson, we will examine the basics of elasticity, including what it is, how it is measured, and how it is used in market analysis. - The first unit of this lesson, The Concept, introduces the elasticity concept and previews its role in market analysis.
- In the second unit, A Little More, examines the importance of elasticity for such topics as market shocks, taxes, and price controls.
- The third unit, Measurement, takes a close look at how elasticity is measured, focusing on the coefficient of elasticity.
- The fourth unit, A Continuum, examines the five categories of elasticity, ranging from elastic to inelastic, that form a continuum.
- The fifth unit and final unit, Market Elasticity, closes this lesson by introducing four key elasticity concepts for the market demand and supply.
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AVERAGE VARIABLE COST Total variable cost per unit of output, found by dividing total variable cost by the quantity of output. When compared with price (per unit revenue), average variable cost (AVC) indicates whether or not a profit-maximizing firm should shut down production in the short run. Average variable cost is one of three average cost concepts important to short-run production analysis. The other two are average total cost and average fixed cost. A related concept is marginal cost.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time at the confiscated property police auction seeking to buy either throw pillows for your bed or a package of blank rewritable CDs. Be on the lookout for bottles of barbeque sauce that act TOO innocent.
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This isn't me! What am I?
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A communal society, a prime component of Karl Marx's communist philosophy, was advocated by the Greek philosophy Plato.
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"Whenever you fall, pick up something. " -- Oswald Avery, scientist
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BLUE
Best Linear Unbiased Estimator
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