• Production Theory
    into three categories: - Land - Labor - Capital The two kinds of inputs: Fixed vs. Variable Inputs Fixed inputs -resources used at a constant amount in the production of a commodity. Variable inputs - resources that can change in quantity depending on the level of output being produced...
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  • Econ Extra Credit
    common example of a fixed input is capital which would be an input that a restaurant would have. The alternative to fixed input is variable input. A fixed input, such as capital, provides the "capacity" constraint for the short-run production of a firm. A variable input, such as labor, provides the...
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  • Demand and Supply Analysis
    production is one whose input level can be varied in the short run. Raw material inputs are a variable factor and unskilled labour is usually thought of as a variable factor. Fixed factor of production: A fixed factor of production is one whose input level cannot be varied in the short run...
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  • Aaaa
    certain good, a great number of inputs or production factors intervene. Production function: S1= f (G, T, P1, Pj, Fi) S1 = Particular supply of good 1. f = Functionality between variables. G = Company goal. P1= Price of good 1. Pj= Price of the related good j. Fj= Price of the production...
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  • This Is Me
    |   | 1.30   |   Variable manufacturing overhead |   | 6.80   |   Fixed manufacturing overhead |   | 2.60   |   | | |   Unit product cost | $ | 21.40   |   | | | | Direct labor is a variable cost. The special order would have no effect on the company’s total fixed manufacturing...
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  • Waltham Motors Division
    : The company should produce, based on the budget data, at least 13,326 units in order to cover all its costs. Q2. Using budget data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) was allocated to planned production? What was the...
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  • Sensitivity Analysis Using Excel
    their base case values, we say we are doing "one at a time" or "singlefactor" sensitivity analysis. Figure 2.1 Model Display A B 1 Controllable Input Unit Price 2 3 Uncontrollable Inputs Units Sold 4 Unit Variable Cost 5 Fixed Costs 6 7 Performance Measure Net Cash Flow 8 C $29 700 $8 $12,000 $2,700...
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  • Theory of Production
    change in total output due to an infinitesimally small change in the variable input (called the continuous marginal product). The discrete marginal product of capital is the additional output resulting from the use of an additional unit of capital (assuming all other factors are fixed). The...
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  • Market
    Law of Diminishing Marginal Product ▪ States that the marginal product of a factor (e.g. factor 1) will diminish as we get more and more of that factor. In other words, as a firm uses more of a variable input, holding the other factor fixed, the marginal product of the variable input will fall...
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  • Law of Diminishing Productivity
    understand and explain production activity by a firm, which then provides insight into market supply. The standard distinction is generally between short run, with at least one fixed and one variable input, and the long run, with all inputs variable. However, in some cases, the very short run or market...
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  • Master of Business Administration
    production function, all inputs are variable. 2. Why is the marginal product of labor likely to increase initially in the short run as more of the variable input is hired? The marginal product of labor is likely to increase initially because when there are more workers, each is able to...
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  • Accounting Homework
    manufacturing overhead | | $ 4 | Variable selling and administrative | | $ 3 | Fixed costs per year: | | | Fixed manufacturing overhead | $ | 200,000 | Fixed selling and administrative expenses | $ | 80,000 | | During its first year of operations, Fletcher produced 50,000 units and...
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  • Microeconomic
    Production is a period of time in which at least one input used for production and under control of the producer is variable and at least one input is fixed. Where fixed input is an input used in production and under the control of the producer that does not change during the time period of analysis. For...
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  • Current Market Condition
    divided into production process which has an effect on variable cost. The short run some inputs are fixed therefore the firm is constrained to what production decisions it can make. In the long run process all inputs are fixed therefore a firm can choose from several other production processes...
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  • Retert
    the business. i. Fixed cost: cost of inputs that do not change with scale. ii. Variable cost: cost of inputs that change with scale. iii. Note: some costs are partly fixed and partly variable. iv. Marginal cost: change in total cost due to the production of an additional unit; equals the rate of...
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  • Economics
    infinitesimally small change in the variable input (called the continuous marginal product). The discrete marginal product of capital is the additional output resulting from the use of an additional unit of capital (assuming all other factors are fixed). The continuous marginal product of a variable input can...
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  • Microeconomics Questions week 3
    production which holds that if more variable input units are used along with a certain amount of fixed inputs, the overall output might grow at a faster rate initially, then at a steady rate, but ultimately, it will grow at a declining rate." (Investopedia) 49) What are Economy and Diseconomy...
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  • Econ
    provide the means used by a firm to control short-run production. The alternative to variable input is fixed input. A fixed input, like capital, provides the capacity constraint in production. As larger quantities of a variable input, like labor, are added to a fixed input like capital, the...
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  • Midterm Review
    additional units of a variable input are combined with a fixed input, at some point the additional output (marginal product) starts to diminish * Law merely states that if additional units of a variable input are combined with a fixed input, at some point, the marginal product of the input will...
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  • Short Run and Long Run
    short run, the law of diminishing returns states that as we add more units of a variable input (i.e. labour or raw materials) to fixed amounts of land and capital, the change in total output will at first rise and then fall.  Diminishing returns to labour occurs when marginal product of labour starts...
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