BUS 207 Chapter Notes - Chapter 5: Ulog

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 207
• Professor: Karen Ruckman

Document Summary

The production manager strives to produce any given level of output at minimal total cost and continually seeks less costly ways to produce the firm s goods and services. The firm s production function indicates the maximum level of output the firm can produce for any combination of inputs. In the short run one or more of the firm s inputs is fixed (cannot be varied). In the long run the firm can vary all of its inputs. There is no universal rule for distinguishing between the short and long run; the dividing line must be drawn on a case-by-case basis. Inputs that cannot be changed in the short run are called fixed inputs. Variable inputs are inputs that can be freely varied. The marginal product is the additional output produced by an additional unit of labour, all other inputs held constant.