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Production, Capital = Fixed, Labour = Variable - Coggle Diagram
Production
Production with one variable input
Average and marginal products
Average product =
Marginal product =
Average product of labor = Output/labor input = q/L
Marginal product of labor = Change in output/change in labor input
= ∆q/∆L
Slopes of the product curve
Average product of labour curve
Marginal product of labour curve
Law of diminishing marginal returns
Labour productivity
Productions with two variable inputs
Isoquants
Input flexibility
Diminishing marginal returns
Substitution among inputs
Two special cases
Production Decisions
Production Technology
Cost Constraints
Input Choices
The technology of production
Inputs
Outputs
Factors of production
Capital
Labour
Raw materials
Entrepreneurship
Returns to scale
Increasing
Constant
Decreasing
Why firms exist
Coordination
Directs production
Short run vs Long run
Short Run
One fixed input
Long Run
All inputs are variable
The production function
q=F(K;L)
K=Capital
L=Labour
Capital = Fixed
Labour = Variable