07 producer behaviour

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9 Terms

1
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what does the production function show

the relationship between inputs and outputs, the maximum amount of the good that can be produced using any combinations of inputs

2
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average product (AP)

this is total output divided by the total amount of an input used

<p>this is total output divided by the total amount of an input used</p>
3
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marginal product (MP)

the additional output for additional unit of an input, generally assume diminishing marginal products

<p>the additional output for additional unit of an input, generally assume diminishing marginal products</p>
4
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what do we mean by the ‘short run’

refers to where at least one factor input is fixed

<p>refers to where at least one factor input is fixed</p>
5
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short run diminishing marginal returns

to double the output will require more than double the input of labour

6
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short run production function graph

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7
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what is MPsmall L

slope of the production function at a given level of labour input

<p>slope of the production function at a given level of labour input</p>
8
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what is APsmall L

slope of a ray from the origin to a given point of the total production function found for a given level of labour input

<p>slope of a ray from the origin to a given point of the total production function found for a given level of labour input</p>
9
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total product graph

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