Production - Production Productionfunction (effientency...

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Production Combination of inputs to create the good and services people consume Production function Relationship between inputs and the max output (effientency ) Marginal productivity Additional unit of output gained from an additional unit of input for example  Change in quantity/ change in labor Diminishing marginal productivity Marginal productivity of an input decline as we  Equations Total revenue= quantity* price Average revenue= total revenues/ quantity Marginal revenues= change in total revenues/ change in quantity ->  marginal benefit Perfectly competitive firm -> MR=P Profit= total revenues-total cost  Economic vs accounting costs opportunity cost total cost- market value of all input used in production economic cost includes opportunity cost which includes explicit and  implicit cost 
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  • Spring '10
  • ERICKA
  • MC Profits, total cost/ quantity, quantity  Marginal revenues=, marginal productivity Marginal, variable cost/ quantity, Marginal revenues= change

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