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ecn5402.ch11

ecn5402.ch11

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Published by Umair Qazi
MICROECONOMIC THEORY
BASIC PRINCIPLES AND EXTENSIONS
EIGHTH EDITION
WALTER NICHOLSON
MICROECONOMIC THEORY
BASIC PRINCIPLES AND EXTENSIONS
EIGHTH EDITION
WALTER NICHOLSON

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Published by: Umair Qazi on Feb 19, 2013
Copyright:Attribution Non-commercial

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08/22/2014

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Chapter 11
PRODUCTION FUNCTIONS
Copyright ©2002 by South-Western, a division of Thomson Learning. All rights reserved.
MICROECONOMIC THEORY
 
BASIC PRINCIPLES AND EXTENSIONSEIGHTH EDITION
WALTER NICHOLSON
 
 
Production Function
• The firm’s
production function for aparticular good (
) shows the maximumamount of the good that can be producedusing alternative combinations of capital(
) and labor (
L
)
=
(
,
L
)
 
Marginal Physical Product
To study variation in a single input, wedefine marginal physical product as theadditional output that can be produced byemploying one more unit of that inputwhile holding other inputs constant
MP 
 capitalof productphysicalmarginal
LL
LMP 
 labor of productphysicalmarginal

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