Chapter 5 - Production. We open this chapter by examining the production function, a quantitative summary of the firm’s production possibilities. Next, we look closely at production in the short run and examine the impact on output of changing a single input. Then we consider production in the long run, when the firm has the flexibility to vary the amounts of all inputs. | Chapter Five Production One-tenth of the participants produce over one-third of the output. Increasing the number of participants merely reduces the average output. ~Norman Augustine, Augustine’s Laws For Discussion Allocating a Sales Force To a greater or lesser extent, almost all firms face the task of finding and retaining customers for their goods. Basic Production Concepts Production Technology A Production Function for Auto Parts Production with one variable Input Short-Run and Long-Run Production Marginal Product The Law of Diminishing Marginal Returns Optimal Use of an Input Example 1 Example 2 Figure Total Product and Marginal Product Production in the Long Run Returns to Scale Least-Cost Production Example 3 Winning in Football and Baseball A Graphical Approach Figure Isoquants and Isocost Lines Figure Producing Output at Minimum Cost Measuring Production Functions Linear Production Production with Fixed Proportions Polynomial Functions The Cobb-Douglas Function | Chapter Five Production One-tenth of the participants produce over one-third of the output. Increasing the number of participants merely reduces the average output. ~Norman Augustine, Augustine’s Laws For Discussion Allocating a Sales Force To a greater or lesser extent, almost all firms face the task of finding and retaining customers for their goods. Basic Production Concepts Production Technology A Production Function for Auto Parts Production with one variable Input Short-Run and Long-Run Production Marginal Product The Law of Diminishing Marginal Returns Optimal Use of an Input Example 1 Example 2 Figure Total Product and Marginal Product Production in the Long Run Returns to Scale Least-Cost Production Example 3 Winning in Football and Baseball A Graphical Approach Figure Isoquants and Isocost Lines Figure Producing Output at Minimum Cost Measuring Production Functions Linear Production Production with Fixed Proportions Polynomial Functions The Cobb-Douglas Function Estimating Production Functions Other Production Decisions Multiple Plants Multiple Products Figure Splitting Production between Two Plants Applications Aluminum vs. Steel in Cars and Trucks Allocating a Sales Force—Revisited Figure Profit Functions for an office supply . | Chapter Five Production One-tenth of the participants produce over one-third of the output. Increasing the number of participants merely reduces the average output. ~Norman Augustine, Augustine’s Laws For Discussion Allocating a Sales Force To a greater or lesser extent, almost all firms face the task of finding and retaining customers for their goods. Basic Production Concepts Production Technology A Production Function for Auto Parts Production with one variable Input Short-Run and Long-Run Production Marginal Product The Law of Diminishing Marginal Returns Optimal Use of an Input Example 1 Example 2 Figure Total Product and Marginal Product Production in the Long Run Returns to Scale Least-Cost Production Example 3 Winning in Football and Baseball A Graphical Approach Figure Isoquants and Isocost Lines Figure Producing Output at Minimum Cost Measuring Production Functions Linear Production Production with Fixed Proportions Polynomial Functions The Cobb-Douglas Function Estimating Production Functions Other Production Decisions Multiple Plants Multiple Products Figure Splitting Production between Two Plants Applications Aluminum vs. Steel in Cars and Trucks Allocating a Sales Force—Revisited Figure Profit Functions for an office supply firm
