ECN 104 Study Guide - Final Guide: Average Cost, Average Variable Cost, Fixed Cost
Document Summary
Production function: the relationship between the quantity of inputs a firm uses and the quantity of output it produces, for a given state of the production technology. Fixed input: an input whose quantity is fixed for a period of time and cannot be varied (for example, land). Variable input: an input whose quantity the firm can vary at any time (for example, labour). Long run: the time period in which all inputs can be varied. Short run: the time period in which at least one input is fixed. Total product curve: a graphical representation of the production function, showing how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input and production technology. Marginal product: the additional quantity of output produced by using one more unit of a given input, holding other inputs and the production technology fixed.