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Section 2 firm decision making

Section 2 firm decision making - (production • Fixed...

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Section 2: Firm Decision-making Production Function A production function represents the relationship between the quantity of output produced (label output y) and various quantities of inputs used to produce the output (label inputs x) Y (output) = f(x1 + x2 + x3 …) Inputs Definitions Variable Input- Input that can be changed in order to change output
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Unformatted text preview: (production) • Fixed Input- Input that does not vary with production (is fixed or given) • Short run- time period that in which the firm operates assuming some inputs are fixed • Long run- Time period long enough that all inputs can be changed (all inputs are variable) •...
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