TEORI PRODUKSI

Demand Facing a Single Firm

in a Perfectly Competitive Market

• The perfectly competitive firm faces a perfectly elastic

demand curve for its product.
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 The Behavior of
Profit-Maximizing Firms

• The three decisions that all

firms must make include:

1.

How much
output to 2.
supply Which
3.
production
technology How much
to use of each
input to
demand

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 Profits and Economic Costs

• Profit (economic profit) is the

difference between total revenue
and total economic cost.
economic profit  total revenue  total economic cost

• Total revenue is the amount

received from the sale of the
product:
(q x P)

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The Production Function
• The production
function or total
product function is
a numerical or
mathematical
expression of a
relationship
between inputs and
outputs. It shows
units of total
product as a
function of units of
inputs.
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 Marginal Product
• Marginal product is
the additional
output that can be
produced by adding
one more unit of a
specific input, ceteris
paribus.
change in total product
marginal product of labor =
change in units of labor used

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 Average Product

• Average product is
the average amount
produced by each
unit of a variable
factor of production.
total product
average product of labor =
total units of labor

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 Production Function for
Sandwiches
Production Function 45
40
35
(2) (3) (4)

Total product
30
(1) TOTAL PRODUCT MARGINAL AVERAGE
LABOR UNITS (SANDWICHES PRODUCT OF PRODUCT 25
(EMPLOYEES) PER HOUR) LABOR OF LABOR 20
15
0 0  
10
5
1 10 10 10.0
0
2 25 15 12.5 0 1 2 3 4 5 6 7
Number of employees
3 35 10 11.7 15

Marginal Product
4 40 5 10.0
10
5 42 2 8.4
6 42 0 7.0 5

0
0 1 2 3 4 5 6 7
Number of employees

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Total, Average, and Marginal
Product
• Marginal product is the slope of
the total product function.
• At point A, the slope of the total
product function is highest; thus,
marginal product is highest.

• At point C, total product is maximum,

the slope of the total product function
is zero, and marginal product
intersects the horizontal axis.

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Total, Average, and Marginal
Product
• When average product is
maximum, average product
and marginal product are
equal.
• Then, average product falls to the
left and right of point B.

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Total, Average, and Marginal
Product
Remember that:
• As long as marginal product
rises, average product rises.
• When average product is
maximum, marginal product
equals average product.
• When average product falls,
marginal product is less than
average product.

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