ECON 201 Lecture Notes - Lecture 7: Popeyes Louisiana Kitchen, Average Cost, Marginal Product
Document Summary
Cash and money not capital in economics. Output: service, or physical product (tangible or intangible) Can use mathematical functions to denote production. Firms merge and acquire other firms to increase efficiency. Horizontal (two companies in same industry merge together) scale. Ex. burger king bought popeyes (merge) but same industry, different variety (different market and different product) scale. The more input you put into production, the more output you get, but output will increase at a slower rate. Ap = slope of production function to origin. The additional productivity you get by increasing input. Mp = change in output / change in input. Parabola productivity above ap on left hand side, below ap on right side. Where parabolas intersect max of ap. Double the input less than double the output. Double the ingredients double the cookies. If you double input, you get more than double output. Generally happens at the beginning of the business.
