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LAW OF DIMINISHING MARGINAL UTILITY: The principle stating that as more of a good is consumed, eventually each additional unit of the good provides less additional utility--that is, marginal utility decreases. Each subsequent unit of a good is valued less than the previous one. The law of diminishing marginal utility helps explain the negative slope of the demand curve and the law of demand.
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Lesson 14: Production | Unit 1: Short-Run Production
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Page: 3 of 25
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Topic:
Two Runs: Short And Long
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- The two key time production periods.
- The short run is a production time period in which at least one input is variable and at least one input is fixed.
- The key is that firms produce and supply output on a day-to-day basis by adding variable inputs to fixed inputs.
- The long run is a production time period in which all inputs are variable.
- The long run is a period long enough to alter the quantities of ALL inputs, especially changing the amount of capital or the size of a factory.
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LONG-RUN INDUSTRY SUPPLY CURVE The relation between market price and the quantity supplied by all firms in a perfectly competitive industry after the industry has completed its long-run adjustment. The long-run industry supply curve effectively traces out a series of equilibrium prices and quantities that reflect long-run adjustments of a perfectly competitive industry to demand shocks. This long-run adjustment can take one of three paths, indicating an increasing-cost industry, a decreasing-cost industry, and a constant-cost industry.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time lost in your local discount super center hoping to buy either a cell phone case or a pair of designer sunglasses. Be on the lookout for the happiest person in the room.
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This isn't me! What am I?
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The first paper currency used in North America was pasteboard playing cards "temporarily" authorized as money by the colonial governor of French Canada, awaiting "real money" from France.
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"Do you want to be safe and good, or do you want to take a chance and be great?" -- Jimmy Johnson, Football Coach
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AEC
Annual Equivalent Costs
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