北大ceer 笔记19.ppt

Chapter Twenty Cost Minimization 成本最小化 Structure The cost minimization problem Average costs Returns to scale and total and average costs Short run and long run costs Cost Minimization A firm is a cost-minimizer if it produces any given output level y 3 0 at smallest possible total cost. c(y) denotes the firm’s smallest possible total cost for producing y units of output. c(y) is the firm’s total cost function （总成本函数）. Cost Minimization When the firm faces given input prices w = (w1,w2,…,wn) the total cost function will be written as c(w1,…,wn,y). The Cost-Minimization Problem Consider a firm using two inputs to make one output. The production function is y = f(x1,x2). Take the output level y 3 0 as given. Given the input prices w1 and w2, the cost of an input bundle (x1,x2) is w1x1 + w2x2. The Cost-Minimization Problem For given w1, w2 and y, the firm’s cost-minimization problem is to solve The Cost-Minimization Problem The levels x1*(w1,w2,y) and x1*(w1,w2,y) in the least-costly input bundle are the firm’s conditional demands for inputs 1 and 2 （条件要素需求）. The (smallest possible) total cost for producing y output units is therefore Conditional Input Demands Given w1, w2 and y, how is the least costly input bundle located? And how is the total cost function （成本函数）computed? Iso-cost Lines （等成本线） A curve that contains all of the input bundles that cost the same amount is an iso-cost curve. E.g., given w1 and w2, the $100 iso-cost line has the equation Iso-cost Lines Generally, given w1 and w2, the equation of the $c iso-cost line isi.e. Slope is - w1/w2. Iso-cost Lines The y’-Output Unit Isoquant The Cost-Minimization Problem The Cost-Minimization Problem The Cost-Minimization Problem The Cost-Minimization Problem A Cobb-Douglas Example of Cost Minimization A firm’s Cobb-Douglas production function is Input prices are w1 and w2. What are the firm’s conditional input demand functions? A Cobb-Douglas Example of Cost Minimization A Cobb-Douglas Exampl