Chapter 23 Terms 102 - P roperties of the P roduction...

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Properties of the Production Function: The production function specifies the maximum possible output that can be produced with a given amount of inputs. It also specifies the minimum amount of inputs necessary to produce a given output. Total Physical Product: Total output. Average physical product: is total product divided by the variable input. Marginal physical product: is the change in total product that occurs when there is a one-unit change in the variable input. Diminishing Marginal Product: The law of diminishing marginal product is the observation that with successive increases in a variable factor of production such as labor, added to fixed factors of production, will reach a point beyond which the extra or marginal product that can be attributed to each additional unit of the variable factor of production will decline. Short-Run versus Long-Run: The short run is a time period when some inputs, such as plant size, cannot be changed. The long-run is a time period in which all
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This note was uploaded on 06/06/2011 for the course ECON 102 taught by Professor Dsilvia during the Fall '11 term at Moraine Valley Community College.

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Chapter 23 Terms 102 - P roperties of the P roduction...

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