Cost curves

aje on January 12, 2020

Case:

  • La Marmotte, January 2012
    Instructions: Complete Exhibit A and provide suggestions for the two key decisions

  • Spreadsheet.xlsx
  • Note: parts of this case rely on finding derivatives. Here is a background note:
Lecture handout: Cost curves*

Textbook Reading: Chapter 2 (Intro, Section 2.1 and 2.2, pp. 39-54)

La Marmotte was published by Sage in 2019. La Marmotte is a fictitious restaurant but based on a real business in Montalbert. You can see whether the skiing is good right now with this webcam.

My favourite example of the importance of having an intuitive understanding of the shape of average costs curves is this one:

Learning Objectives: Sunk cost fallacy, short term shut down condition, profit maximisation, deriving a supply curve.

Cutting edge theory: La Marmotte was published in 2019!