301lec9

301lec9 - Microeconomics 301 Department of Economics UBC...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Microeconomics 301 Department of Economics UBC Production Theory and Firm’s Optimal Decisions Topics: Production Function and Technology- today Costs of Production Production Decision 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Main premises: (1) A firm’s goal is profit maximization. (2) A firm possesses production technology (production function). Main decisions of a typical firm are: (i) What output to produce (guns or but- ter, computer hardware or software, cars or houses)? (ii) How much output to produce? Whether to produce at all? (the price of output is either fixed or the output decision determines the price) (iii) What prices to set? (iv) Input mix: which inputs to use in pro- duction and in what proportions. Inputs are: capital, labor, land, technology. Capital is a very general term in would in- clude different, machines, tools, comput- ers, software etc. (v) How to compete with other firms? (Oligopoly). 2
Background image of page 2
Study an individual firm. We will fo- cus on the decision (ii) and (iv): How much output to produce and at what
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

301lec9 - Microeconomics 301 Department of Economics UBC...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online