exam3 - Production function- the relationship between the...

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Production function - the relationship between the quantities of inputs used and the maximum quantity of output that can be produced, give current knowledge about technology and organization Short run - a period of time so brief that at least one factor of production cannot be varied practically (at least one input is fixed) Long run - a lengthy period of time that all inputs can be varied (all inputs are varied) Marginal product of labor (MPL) - the change in total output, ∆q, resulting from using an extra unit of labor ∆L holding other factors constant MPL = ∆q/∆L Law of diminishing Marginal Product - IN the short run where there is a fixed input, as you add more and more of a variable input at some point the marginal product of the variable input begins to decrease Isocost Line- all the combinations of inputs that require the same total expenditures, shows combination of K and L that cost the firm the same amount. Isoquant-
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exam3 - Production function- the relationship between the...

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