Summary

Summary Producion fuction and cost functions

15 views 0 purchase

Course
ECON1010 (ECON1010)

Institution
Trent University (TrentU )

These notes provide a comprehensive overview of key concepts in the area of Production and Costs within microeconomics. They are structured into four main sections: Production Functions (Short-Run and Long-Run), Isoquants and Isocosts, Cost Functions (Total, Average, and Marginal Costs), and Econom...

[Show more]

Preview 1 out of 4 pages

View example

Uploaded on June 14, 2024
Number of pages 4
Written in 2023/2024
Type Summary

isoquants and isocosts
marginal cost
average costs
economies of scale
production functions short run and long run

CA$11.60

Added

Add to cart Add to wishlist

100% satisfaction guarantee
Immediately available after payment
Both online and in PDF
No strings attached

Production and Costs

Understanding production and costs is crucial in microeconomics, as it helps explain
how firms make decisions about resource allocation and output levels to maximize
profits.

Production Functions (Short-Run and Long-Run)

Production Function:
- A production function describes the relationship between inputs (factors of
production like labor and capital) and the resulting output. It is expressed as $ Q =
f(L, K) $, where $ Q $ is the quantity of output, $ L $ is labor, and $ K $ is capital.

Short-Run Production Function:
- In the short run, at least one factor of production is fixed. Typically, capital is
considered fixed, and labor is variable. The short-run production function shows how
output changes as the variable input (labor) changes, holding capital constant.
- **Law of Diminishing Returns:** In the short run, as more units of a variable input
are added to a fixed input, the additional output (marginal product) from each
additional unit of the variable input eventually decreases.

Long-Run Production Function:
- In the long run, all factors of production are variable. Firms can adjust all inputs to
find the most efficient production method.
returns to Scale: This concept describes how output changes in response to
proportional changes in all inputs:
Increasing Returns to Scale: Output increases more than proportionally to an
increase in all inputs.
Constant Returns to Scale: Output increases proportionally to an increase in all
inputs.
Decreasing Returns to Scale: Output increases less than proportionally to an
increase in all inputs.

Isoquants and Isocosts

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller tamannaverma. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for CA$11.60. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75632 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling