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  explicit costs is the input costs that require an outlay of money aka 
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This note was uploaded on 11/19/2010 for the course ECON ECON200 taught by Professor Ericka during the Spring '10 term at University of Washington.

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Production - Production Productionfunction (effientency...

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