Q = f(n, k) (labour varies, k is constant: three concepts relating output q to variable factor n ii. iii. i. Extra output form one last unit of input. Total output per unit of variable factor, n. Tp curve used to derive tc curve: law of diminishing marginal product (returns, ldmp or ldmreturns (don"t confuse with mrevenue) i. ii. Is the idea that as more of the variable factor is added to a given amount of the fixed factor, the additional output diminishes after a certain point (inflection point), ceteris paribus. Reason: more variable factor has less of the fixed factor to work with, same reason as the shape of the mother of all curves, the tp g, cost in the short run, total, average, marginal costs i. Notes: tc = tfc + tvc, ac = afc + avc, mc = 0 + mvc, fixed costs. Q i: variable costs i, total costs i. ii.
