1. Quiz 3
Ends at 11:35
Read carefully
Raise your hand if you have questions
This is not the end of today’s class

2. Outline for Monday, August 4
Remember
Homework due Friday – posted later today
Quiz Monday
Review Friday
Supply curves under perfect competition
Welfare

3. Short-run cost
We can break down short-run TC into
Sunk costs – Pay no matter what
Fixed but not sunk – Pay if q > 0
e.g., franchise fee, license fee, protection money
Variable costs – Pay depending on q
Ignore sunk costs
They cannot be recovered
The firm may make a loss