CH 7

• Cost and cost Minimization

Preview

• 1. economic cost ~opportunity cost

• 2. sunk and nonsunk cost

• 3. Short run cost :

Fixed cost, variable cost and nonsunl cost

• 4. Long run cost minimization :

Explicit and implicit costs

• What is the cost to an airline of using one of its planes in scheduled passenger service ?

• Explicit costs: fuel, crew salaries , maintenance, airport fees, food, drinks

• Implicit costs: 放棄的租金

機會成本• The value of the next best alternative that is

forgone when another alterative is chosen

• 店要關門大吉 ?

• 繼續經營的花費 =100,000( 勞工 )

+80,000( 原料 )

+ 您的投入 ( 包括勞動與資金 ) 的機會成本(75,000)=255,000

機會成本 (looking forward)

• Forward looking • It measures the value that the decision maker sacrificed at

the time the decision is made and beyond • 汽車廠已購入鋼片 (sheet steel) = 存貨價值 =1,000,000• 這些剛片可以用於製造汽車或是出售• 若出售 , 可賣 1,200,000• 用於製造汽車的機會成本 ?• =1,200,000( 決策制定時放棄的價值 ) 不等於會計成本

1,000,000

會計與經濟學的橋樑 : 財管

• 第35號公報• 第10號公報• 員工入股分紅

Also depends on the decision being made

• 還沒買鋼時 , 買鋼的機會成本 =?

• 1,000,000

讀碩專的機會成本 =?

• 讀碩專的成本 =

1. 學費的機會成本2. 時間價值的機會成本3. ,……whatelses

~ 上碩專課壓力較大 ,

~ 教大學部血壓較高

• 讀博士的成本 :

Accounting costs and economic costs

• Accounting costs: the total of explicit costs that have been incurred in the past

To serve an audience outside the firm

• Economic costs: the sum of the firm’s explicit costs and implicit costs

• 開店預估營收 < economic cost: 不開

短期成本分析• 1. fixed costs and variable costs

• 2. fixed costs :sunk costs and nonsunk costs

Sunk cost vs nonsunk cost

• Sunk costs: costs that have already been incurred and cannot be recovered

• Nonsunk costs: costs that are incurred only if a particular decision is made

• Example: 買電影票看電影 , 不好看 , 電影票已經買了 , cannot be recovered

• 但是你可以提前離場 , 省去時間成本 (nonsunk costs)

Sunk and nonsunk fixed costs

• 海角七號 : 不賣座 , 劇本的剩餘價值 =?

• 不要廣告了 :

Sunk costs and nonsunk costs

• Example : 已繳學費 = 學雜費 + 學分費• 何者是 sunk costs, nonsunk costs,

• 食之無味 , 棄之可惜 !~ 套牢

Sunk costs and nonsunk costs

• Example : 保齡球工廠 (specified that it has no alterative uses) 專屬 , 投資需 500 萬

• In deciding whether to build the factory, 500 萬 is a non sunk cost

• After the factory is built, 500 萬 is a sunk cost• 專屬投資的產業 , 比較會導致激烈競爭 , because Exit cost is high ! 如 DRAM, TFT-LCD

Sunk cost vs fixed cost

• Fixed costs 與 variable costs 是短期的概念• Fixed and sunk costs : output insensitive and

unavoidable, even if the firm produces zero output: 例如 , 只有特定用途的專屬設備

• 買了電影票 , 看到一半 , 很難看 , 這票還有其他使用價值 ?

• Fixed and nonsunk costs: outputs insensitive, but avoidable if the firm produces zero output. 例如 , 教室的電費 , 或是有人願意買或承租的設備

• 只有一名 , 上課要不要開燈 ? 2名 , 3,….

Quiz 0324

• What mistakes Sparky did in his late career ?

Variable cost vs fixed cost

• 只有一名乘客 , 航班要不要飛 : 要• 油料成本就是 nonsunk cost, 餐點就是 variable

cost• 當有兩名時 , nonsunk cost 一樣 , 但是總變動

成本增加• Fixed costs 與 variable costs 是短期的概念• Variable costs: 一定是 nonsunk? Output

sensitive, 例如 labor, materials • Fixed costs: the cost of fixed inputs: it does not

vary with output

FIGURE 7-13 Classifying Inputs and Costs in the Short Run

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-13

帳戶管理費要收 ?

• 1. 有話好説?

• 2. 電子報• 3. 不能加入存保 ?

Long run cost minimization

Cost minimization

• Long run: the period of time that is long enough for the firm to vary the quantities of all of its inputs as much as it desires

• Short run : the period of time in which at least one of the firm’s input quantities cannot be changed

Long run cost minimization

長期成本函數QrwrKQrwwLrwQC

長期要素需求QrwKQrwL

QKLFtosubject

wLrKKL

),,(*),,(*),;(

),,(*),,,(*

),(:

min,

• 找 最低成本線 such that

• 在等產量線上

FIGURE 7-1 Isocost Lines

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-01

FIGURE 7-1 Isocost Lines

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-01

FIGURE 7-2 Cost-Minimizing Input Combination

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-02

經濟涵義

出K花在 K每在 每一元的出L花在 L每在 每一元的r

MP

w

MP

r

w

MP

MP

L

KMRTS

等成本線斜率等產產量線斜

KL

K

LLK

角解

FIGURE 7-3 Corner-Point Solution to theCost-Minimization Problem

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-03

比較靜態• 要素價格改變• 產量改變

FIGURE 7-5 Comparative Statics Analysis of Cost-Minimization Problem with Respect to the Price of Labor

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-05

CASE

• Supertanker 1, 2

• Offshoring cost

FIGURE 7-6 Comparative Statics Analysis of the Cost-Minimization Problem with Respect to the Price of Labor for a

Fixed-Proportions Production Function

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-06

FIGURE 7-8 Comparative Statics Analysis of Cost-Minimization Problem with Respect to Quantity: Normal Inputs

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-08

FIGURE 7-9 Comparative Statics Analysis of Cost-Minimization Problem with Respect to Quantity: Labor is an Inferior Input

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-09

FIGURE 7-10 Burke Mills Revisited

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-10

要素需求

FIGURE 7-11 Labor Demand Curve

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-11

要素需求價格彈性

r

rK

K

w

wL

L

rKwL

,, ,

FIGURE 7-12 The Price Elasticity of Demand for Labor Depends on the Elasticity of Substitution Between Labor and Capital

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-12

(Figure continues on next slide)

FIGURE 7-12 (Continued)

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-12

Short-run Cost minimization

短期成本函數KrQKwLKrwQC

短期要素需求QKL

QKKLFtosubject

wLKrL

),(*),,;(

),(*

),(:

min

FIGURE 7-13 Classifying Inputs and Costs in the Short Run

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-13

FIGURE 7-14 Short-run Cost Minimization with One Variable Input

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-14

• F點 ( 短期 )比 A點 ( 長期 ) 成本高

FIGURE 7-15 Short-run Input Demand versus Long-runInput Demand

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-15

FIGURE 7-16 Short-Run Cost Minimizing Input Combination with Two Variable Inputs

Besanko & Braeutigam/Microeconomics: An Integrated ApproachChapter 7, Figure 07-16

More than one variable input with one fixed input

ISOQUANTQKKMLFtosubject

mMwLKrL

~),,(:

min