11-4 - Marginal Product The marginal product of any input...

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Economic profit vs. Accounting profit Accounting profit = total revenue minus total explicit costs Economic profit= total revenue minus total costs The Production Function A production function shows the relationship between the quantity of inputs (land, labor, and capital) used to produce a good and the quantity of output of that good It can be represented by a table, equation, or graph
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Unformatted text preview: Marginal Product The marginal product of any input is the increase in output arising from an addition unit of that input, holding all other inputs constant Marginal product of labor (MPL) = change in quantity/change in labor Costs in the short run & long run Shorn run: some inputs are fixed (factories, land) The costs of these inputs are FC...
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This note was uploaded on 02/09/2012 for the course ECON 101 taught by Professor Gottlieb during the Spring '08 term at Rutgers.

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