Microeconomics › Section G · Production, costs, and industry structure › Topic G.2
Production in the short run
A firm is a machine for turning inputs into output - and how output responds as inputs are added is the physical fact underneath every cost curve the course will draw. In the short run, some input is frozen, and that single fact produces one of economics' most reliable laws.
In this topic
- Firms and the profit assumption
- Two clocks: short run and long run
- The production function and its three measures
- The law of diminishing marginal returns
- Worked example: a pizza kitchen
- Why MP rises before it falls
- Technology and productivity
- Worked example: computing MP and AP from a table
- Where this is heading
- Common mistakes to avoid
- Key takeaways
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