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TOTAL PRODUCT AND MARGINAL PRODUCT: A mathematical connection between marginal product and total product stating that marginal product IS the slope of the total product curve. If the total product curve has a positive slope (that is, is upward sloping), then marginal product is positive. If the total product curve has a negative slope (downward sloping), then marginal product is negative. If the total product curve has a zero slope (horizontal), then marginal product is zero. Moreover, if the total product curve has a positive and increasingly steeper slope, then the marginal product is positive and rising. If the total product curve has a positive and decreasingly steeper slope, then the marginal product is positive but falling.
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SHORT-RUN PRODUCTION: An analysis of the production decision made by a firm in the short run, with the ultimate goal of explaining the law of supply and the upward-sloping supply curve. The central feature of this short-run analysis is the law of diminishing marginal returns, which results in the short run when larger amounts of a variable input, like labor, are added to a fixed input, like capital. This analysis of short-run production is but the first step in a brisk walk toward a better understanding of supply. Further steps include the cost of short-run production, especially marginal cost, and the market structure in which a firm operates, such as perfect competition or monopoly. See also | fixed input | variable input | law of diminishing marginal returns | marginal product | total product | average product | marginal cost | total variable cost | total cost | total fixed cost | profit maximization | total revenue and total cost | marginal revenue and marginal cost |
Recommended Citation:SHORT-RUN PRODUCTION, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 2, 2025].
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AGGREGATE DEMAND CURVE A graphical representation of the relation between aggregate expenditures on real production and the price level, holding all ceteris paribus aggregate demand determinants constant. The aggregate demand (AD) curve is one side of the graphical presentation of the aggregate market. The other side is occupied by the long-run aggregate supply curve and/or the short-run aggregate supply curve. The negative slope of the aggregate demand curve captures the inverse relation between aggregate expenditures on real production and the price level. This negative slope is attributable to the interest-rate, real-balance, and net-export effects.
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Parker Brothers, the folks who produce the Monopoly board game, prints more Monopoly money each year than real currency printed by the U.S. government.
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"always remember an epitaph which is in the cemetery at Tombstone, Arizona. It says: „Here lies Jack Williams. He done his damnedest.¾ I think that is the greatest epitaph a man can have ‚ When he gives everything that is in him to do the job he has before him. That is all you can ask of him and that is what I have tried to do. " -- Harry Truman, 33rd US president
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Aggregate Supply
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