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  • CPC Ec 01

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    Arslan Rammay
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    The production function shows the relationship between inputs like workers and the quantity of output produced. The marginal product or additional output from each additional worker declines as more workers are added, causing the production function slope to flatten in a pattern of diminishing marginal returns. The total-cost curve graphs the relationship between a firm's costs and quantity produced as determined by its underlying production function.

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    cpc Ec 01 (5)

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    The production function shows the relationship between inputs like workers and the quantity of output produced. The marginal product or additional output from each additional worker declines as more workers are added, causing the production function slope to flatten in a pattern of diminishing marginal returns. The total-cost curve graphs the relationship between a firm's costs and quantity produced as determined by its underlying production function.

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    7 views3 pages

    CPC Ec 01

    Uploaded by

    Arslan Rammay
    The production function shows the relationship between inputs like workers and the quantity of output produced. The marginal product or additional output from each additional worker declines as more workers are added, causing the production function slope to flatten in a pattern of diminishing marginal returns. The total-cost curve graphs the relationship between a firm's costs and quantity produced as determined by its underlying production function.

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    of 3

    The Production Function

    The Production Function

     Diminishing Marginal Product


     The slope of the production function measures the
    marginal product of an input, such as a worker.
     When the marginal product declines, the production
    function becomes flatter.
    From the Production Function to
    the Total-Cost Curve

     The relationship between the quantity a firm can


    produce and its costs determines pricing decisions.
     The total-cost curve shows this relationship graphically.

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