Abstract
Costs are values sacrificed in order to gain benefits. They can be divided into fixed costs c f and variable costs c u . Fixed costs do not vary with the quantity of production q, while variable costs do. Total costs c are the sum of fixed and variable costs. Now, suppose variable costs are a linear increasing function of production. In this case we can state: {fy23-1}
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It is assumed that p is independent of q.
cm = 0.75q2 — 7q + 20.
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© 1998 Springer Science+Business Media Dordrecht
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Heijman, W.J.M. (1998). Analysis of Costs and Supply Function. In: The Economic Metabolism. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-5038-5_3
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DOI: https://doi.org/10.1007/978-94-011-5038-5_3
Publisher Name: Springer, Dordrecht
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