Cost Theory

Read the full Week 6 chapter covering cost minimisation, the isocost line, short-run and long-run cost functions, average and marginal costs, economies of scale, and the LRAC envelope - including all derivations and key diagrams from lecture.

Download the clean or annotated slide decks (three parts) and watch the fourteen asynchronous lecture videos covering basic cost concepts, total cost functions, economic profit, short-run vs long-run costs, average and marginal costs, economies of scale, and the LRAC envelope.

Seven interactive tools: the cost minimisation sandbox, two-panel cost derivation, bang-for-the-buck reallocation engine, SR vs LR cost curve stack, LRAC envelope builder, minimum wage automation simulator, and efficient scale finder.

Submit your graded problem set for Week 6 on Brightspace. Complete and submit before the deadline to receive full credit.

20 cards covering economic vs accounting profit, the isocost line, cost minimisation (bang-for-the-buck rule), all five SR cost curves, ATC minimum, the LRAC envelope theorem, economies and diseconomies of scale, and the common IRS/economies-of-scale distinction.