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Production Theory and Diminishing Marginal Productivity
A common business goal is to earn a profit. Often this goal is stated as wanting to maximize profit or to earn as much profit as possible with the available resources.
This page links to several pages (listed below) that discuss the question of whether a manager can increase profit by altering the inputs used to produce the output or product. The topics on these pages may be best understood if the pages are studied in the order they are listed here.
Reference pages:
- Introduction (how much to produce)
- Diminishing marginal productivity
- Short-run v. long-run analysis
- Fixed inputs and variable inputs
- Production function
- Stages of production
- Profit maximizing level of production
- Marginal value product and marginal input cost
- Demand for the variable input
- Defining and determining cost
- Profit maximizing level of production (again)
- Marginal cost and marginal revenue
- Supply of the output (product)
- Loss minimization
- How to produce
- What to produce
- Summary and Implications
Last Updated September 14, 2010
Email: David.Saxowsky@ndsu.edu
This material is intended for educational purposes only. It is not a substitute for competent professional advice. Seek appropriate advice for answers to your specific questions.
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