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January 26, 2020 

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HETEROGENEOUS: A market characterized by buyers with different needs and wants. A company utilizes a concentrated targeting strategy for this group. This market requires the company to divided the market into groups by a process called market segmentation. The company then develops a different marketing mix to satisfy each of these groups or segments.

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PRODUCT:

A generic term for a tangible good or an intangible service that is the output or end result of the resource transformation process of a business firm. This notion of product usually surfaces in the context of analyzing the short-run production of a firm, often modified by the terms total, marginal, and average, as in total product, marginal product, and average product.
Product is another term for the output of a firm's production activity. The product of a firm might be a tangible good or an intangible service. It might be sold to consumers as a final consumption good or other business firms as a capital good. The product might be purchased by government or exported to another country. Or it might even serve as an intermediate input in the production of another good.

A Few Examples

Firms produce a wide range of different products. A few examples are illustrated with the hypothetical economy of Shady Valley. An extensive array of analogous real world products also exists.
  • Consider, for example, a tangible good offered by Waldo's TexMex Taco World restaurant. A key product for Waldo is the Super Deluxe TexMex Gargantuan Tacos (with sour cream and jalapeno peppers).

  • Another example of a product is provided by the Shady Valley Amusement Park. In this case the produce is the intangible service provided by thrilling rides on the Monster Loop Death Plunge Roller Coaster.

  • On the manufacturing side of the economy, the product generated by Mona Mallard's Duct Tape factory is rolls and rolls of Mona Mallard Duct Tape.

  • An example of a product that is an intermediate good used for other production is quagliminium, a rare mineral substance, mined by the Queoldiolian Quagliminium Extraction Concern operating in the Republic of Northwest Queoldiolia.

Total, Marginal, and Average

The analysis of short-run production is most concerned with the connection between the amount of product generated by a firm and the quantity of the variable input used. This gives rise to three related product notions--total product, marginal product, and average product.
  • Total Product: This is the total quantity of output produced by a firm, usually corresponding with a given quantity of inputs. The relation between total product and a variable input such as labor is the foundation for the short-run production analysis.

  • Marginal Product: This is the change in total product resulting from a unit change in a variable input, keeping all other inputs unchanged. Marginal product is guided by the law of diminishing marginal returns and plays a big role in the short-run production decision by a firm.

  • Average Product: This is the total quantity of output produced per unit of variable input, holding all other inputs unchanged.

<= PRODUCER SURPLUSPRODUCT DIFFERENTIATION =>


Recommended Citation:

PRODUCT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2020. [Accessed: January 26, 2020].


Check Out These Related Terms...

     | output | product inputs | fixed input | variable input | production function | production time periods | total product | marginal product | average product | law of diminishing marginal returns | marginal returns | production stages |


Or For A Little Background...

     | short-run production | analysis | production | production cost | variables | labor | capital | economic analysis | marginal analysis | factors of production | microeconomics |


And For Further Study...

     | long-run production analysis | total product and marginal product | average product and marginal product | total product and average product | gross domestic product |


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