ECON 1000 Chapter Notes - Chapter 11: Ceteris Paribus, Diminishing Returns, Marginal Cost

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ECON 1000 Full Course Notes
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A period of time in which there is a fixed scale of production. In the short run, a firm"s plant is fixed (a fixed scale) The firm can increase its output by hiring more workers. In the long run, the firm can increase its output by changing the plant size and by hiring more people. Relationship between output and the quantity of labour employed. In the short run where some factor of production is fixed. The total amt. that is produced during a given period of time. The additional output that can be produced by adding one more unit of a specific input, ceteris paribus, holding all other inputs constants. As we vary the quantity of labor, with capital being fixed, output changes: increasing marginal returns between 0 and l1, diminishing marginal returns between l1 and l3, negative marginal returns after l3. First at an increasing rate and then at a decreasing rate.

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