ECN 104 Lecture Notes - Lecture 9: Lexus Gs, Average Cost, Average Variable Cost

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Ecn 104 chapter 11 march 16th. The importance of the firm"s production function, the relationship between quantity of inputs and quantity of output: why production is often subject to diminishing returns to inputs. The long run is the period in which all inputs can be varied. The short run is the period in which at least one input is fixed. The total product curve shows how the quantity of output depends on the quantity of the variable input, for a given quantity of the fixed input. Production function and tp curve for alec and janet"s farm. Although the total product curve in the figure slopes upward along its entire length, the slope isn"t constant: as you move up the curve to the right, it flattens out due to changing marginal product of labor. Figure 11-1: production function and total product curve for alec and janet"s farm.