Modeling the Firm - Production
Overview
Firms produce goods and services that are then consumed by the consumers in an economy. However, production is not free.
Firms face constraints on the amount of any good or service that it can produce, primarily in the form of production
costs.
As such, the firm faces decisions about how much to produce in order to maximize its
profits.
Topics
- Production Function
- Costs are the flip side to the production function.
Whereas, the production asks how much product can be produced given a certain (dollar) amount of inputs,
costs as the question, what is the dollar amount of input required to produce a certain level of goods/services.
- Marginal Product
