PART 1: 
         SHORT RUN PRODUCTION COST
   
     Chapter Summary
     
      Types of production cost in short run
     
      Apply the short run production cost formula
     
      Sketch short run production cost curves
     
      Describe the relationship between each types 
      of short run production cost
  CHAPTER OBJECTIVES
   
    After this chapter, you will be able to:
    
     Classified the types of costs in the short run 
     and long run production
    
     Apply the short run production costs formula
    
     Sketch short run production and long run 
     production cost curves
    
     Explain the relationship between each types of 
     short run production costs
                 PART 2:
        LONG RUN PRODUCTION COST
   
    Production cost in long run: Long Run 
    Average Cost (LRAC)
   
    The LRAC curve – Planning curve
   
    Optimum output level using Planning Curve
   
    Economies of scale and Diseconomies of 
    scale
   KEY TERMS
                            
     Theory of Production     Cost of Production
                               
                               Fixed cost
       Total Production (TP)
                               
                               Variable cost
       Marginal Production 
                               
       (MP)                     Total cost (TC)
                               
                               Average fixed cost (AFC)
       Average Production 
                               
       (AP)                     Average variable cost 
                               (AVC)
       Law of Diminishing      
       Returns                  Average total cost (ATC)
                               
                                Marginal cost (MC)
      
       Short run               
                                Diseconomies of scale
      
       Long run                
                                Economies of scale
                               
                                Constant return to scale
  Short run costs
   
    Cost is very important measurement for a 
    producer to achieve firm’s objectives
   
    In the short run production, the firm is facing 8 
    types of costs
    
     Total cost (TC)
    
     Fixed cost (FC)
    
     Variable cost (VC)
    
     Average fixed cost (AFC)
    
     Average variable cost (AVC)
    
     Average total cost (ATC)
    
     Marginal cost (MC)