管理经济学,英文版3.pptVIP

Chapter 3 Marginal Analysis for Optimal Decision Making Optimization An optimization problem involves the specification of three things: Objective function to be maximized or minimized Activities or choice variables that determine the value of the objective function Any constraints that may restrict the values of the choice variables Choice Variables Choice variables determine the value of the objective function Continuous variables Can choose from uninterrupted span of variables Discrete variables Must choose from a span of variables that is interrupted by gaps Net Benefit Net Benefit (NB) Difference between total benefit (TB) and total cost (TC) for the activity NB = TB – TC Optimal level of the activity (A*) is the level that maximizes net benefit Optimal Level of Activity (Figure 3.1) Marginal Benefit Marginal Cost Marginal benefit (MB) Change in total benefit (TB) caused by an incremental change in the level of the activity Marginal cost (MC) Change in total cost (TC) caused by an incremental change in the level of the activity Marginal Benefit Marginal Cost Relating Marginals to Totals Marginal variables measure rates of change in corresponding total variables Marginal benefit marginal cost are also slopes of total benefit total cost curves, respectively Relating Marginals to Totals (Figure 3.2) Using Marginal Analysis to Find Optimal Activity Levels If marginal benefit marginal cost Activity should be increased to reach highest net benefit If marginal cost marginal benefit Activity should be decreased to reach highest net benefit Optimal level of activity When no further increases in net benefit are possible Occurs when MB = MC Using Marginal Analysis to Find A* (Figure 3.3) Unconstrained Maximization with Discrete Choice Variables Increase activity if MB MC Decrease activity if MB MC Optimal level of activity Last level for which MB exceeds MC Irrelevance of Sunk, Fixed, Average Costs Sunk costs Previously paid cannot be recovered Fixed costs