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specifies the maximum output that can be produced with a given quantity of inputs
is the total amount of output produced in physical units
is the extra output produced by one additional unit of input holding the other inputs constant
is the total output divided by the total units of inputs
will be less and less when we add units of inputs while holding the other inputs constant
In this case, the output change is proportional to the change of all of the inputs
its when a balanced increase of all of the inputs leads to a less than proportional increase in the total output
also called economies of scale
In this case output increases more than proportionally to the increase of the inputs.
or
arise when an increase in all inputs leads to a more than proportional increase in the level of output
is the period where firms can adjust production by changing some production factors such as labor and raw materials
run is the period of time where firms can change all productions factors including capital.
occurs when new engineering knowledge improves production techniques for existing products
is when new or improved products are introduced in the marketplace
measures the ratio of the total output to a weighted average of the inputs
is the productivity of only the workers, holding all other inputs constant
consider most of the time capital and labor
productivity arise from
is the total amount of cost given a level of production.
are the costs that are independent to the level of production
are the ones that depend on the level of production
. It refers to the cost of the last produced unit
is the total cost divided by the total amount of units produced
When the marginal cost is below the average cost is below the average cost, the average cost is
when the marginal cost is over the average cost, the average cost is
