Chapter6ProductionTheoryAnalysis.docVIP

Chapter 6 Production Theory Analysis . Topics to be Discussed The Technology of Production Isoquants Production with One Variable Input (Labor) Production with Two Variable Inputs Returns to Scale Introduction In this chapter we turn our attention to the supply side of the market. We hope to answer the question, “How do producers determine price and output?” The Technology of Production Production The process of combining inputs or factors of production to achieve an output. Categories of Inputs (factors of production) Labor (L), Raw materials, Capital(K) The Production Funct