Ch 6: Production & Costs in Economic Markets

About This Chapter

In this chapter, we'll take a look at production and costs as they relate to economic markets. Our expert instructors will provide you with lessons via short videos and self-assessment quizzes so you can track your progress along the way.

Production & Costs in Economic Markets - Chapter Summary & Learning Objectives

This chapter will take a look at production and cost and relate them back to what you've learned so far about markets in microeconomics. We'll teach you basic concepts and definitions before gradually moving on to more complex topics. Taught by expert instructors, these lessons allow you to learn at your own pace while still getting a professional quality education right from your own home. Once you've completed a lesson you can take one of our self-assessment quizzes to see how well you've understood the lesson. By the end of this chapter you'll be able to:

  • Describe total product, average product and variable cost
  • Remember the Law of Diminishing Marginal Returns
  • Note the differences between short-run and long-run costs
  • Explain cost minimization and productive efficiency
  • Describe Economies of Scale

VideoObjectives
What is Short-Run Production? - Definition & Examples Learn what short-run production is.
Total Product, Average Product & Marginal Product in EconomicsAnalyze how total product, average product and marginal product differ from one another.
Identifying Fixed Costs & Variable Costs for ProducersStudy ways to identify fixed cost and variable cost and how they relate to producers in microeconomics.
The Law of Diminishing Marginal ReturnsDiscover how the Law of Diminishing Marginal Returns applies to production.
Using the Total Cost Curve to Make Production Decisions in the Short-RunLearn how to use the Total Cost Curve to make choices in production.
Average Cost Vs. Total Cost: Making Production Decisions in the Short-RunCompare average cost and total cost and learn what they can tell us about production decisions.
How Marginal Costs Differ from Average & Total CostsLearn how marginals differ between average and total costs.
Product & Cost Curves: Definitions & Use in Production Possibility CurvesAnalyze product and cost curve as a tool to use in production possibility curves.
Understanding Long-Run Production Decisions in EconomicsDefine long-run production decisions as they relate to economics.
Short-Run Costs vs. Long-Run Costs in EconomicsExamine the differences between short-run costs and long-run costs.
What Are Economies of Scale? - Definition & Impact on Fixed CostsLearn about economies of scale and their impact on fixed cost.
Cost Minimization & Productive EfficiencyAnalyze the concepts of Cost Minimization and Productive Efficiency and see how they are related.

12 Lessons in Chapter 6: Production & Costs in Economic Markets
Test your knowledge with a 30-question chapter practice test
What is Short-Run Production? - Definition & Examples

1. What is Short-Run Production? - Definition & Examples

Economists are always interested in helping firms make more money, but how do they actually do that? The concept of short-run production helps explain how economics can really help managers.

Total Product, Average Product & Marginal Product in Economics

2. Total Product, Average Product & Marginal Product in Economics

For producers, knowing how to allocate resources to create their products is vital. This lesson explains the concepts of total product, average product, and marginal product, and how each of these helps producers determine how to allocate resources.

Identifying Fixed Costs & Variable Costs for Producers

3. Identifying Fixed Costs & Variable Costs for Producers

Ever wonder why the price of brand-name drugs is so much more than generics? Or why all tablet prices seem to congregate at about the same level? This lesson explains those and other mysteries through the lenses of variable and fixed costs.

The Law of Diminishing Marginal Returns

4. The Law of Diminishing Marginal Returns

Ever wonder what keeps us from eating nothing but our favorite foods? Or how we determine in what order to request different goods? Much of that comes down to the law of diminishing marginal returns, which proves there is too much of a good thing.

Using the Total Cost Curve to Make Production Decisions in the Short-Run

5. Using the Total Cost Curve to Make Production Decisions in the Short-Run

If you've ever wondered how ice cream trucks don't carry so much ice cream as to cause it to melt out the back door, then this lesson on total cost curves and production decisions is for you.

Average Cost Vs. Total Cost: Making Production Decisions in the Short-Run

6. Average Cost Vs. Total Cost: Making Production Decisions in the Short-Run

Knowing the difference between average cost and total cost can help a company determine prices and when it's time to expand. In case you were curious, this lesson explains both.

How Marginal Costs Differ from Average & Total Costs

7. How Marginal Costs Differ from Average & Total Costs

A major concern for producers is trying to figure out how much something costs to make. Through using marginal costs, total costs, and average costs, producers get a much better idea of the prices they should charge.

Product & Cost Curves: Definitions & Use in Production Possibility Curves

8. Product & Cost Curves: Definitions & Use in Production Possibility Curves

Ever heard of having too many cooks in the kitchen? Product and cost curves demonstrate the real economics behind having too much help, too many gadgets, and not enough money to go around.

Understanding Long-Run Production Decisions in Economics

9. Understanding Long-Run Production Decisions in Economics

Companies cannot afford to simply fulfill their contracts and hope for them to be repeated. Instead, they always have to keep an eye on the long run, or the economic period just after all current contracts have been fulfilled.

Short-Run Costs vs. Long-Run Costs in Economics

10. Short-Run Costs vs. Long-Run Costs in Economics

In this lesson, we look at the role of short-run costs and long-run costs for producers. We see how both are essential to companies, while each has a specific role in long-term survival and daily operations.

What Are Economies of Scale? - Definition & Impact on Fixed Costs

11. What Are Economies of Scale? - Definition & Impact on Fixed Costs

People talk often about the importance of 'economies of scale,' but what does that even mean? This lesson explains that concept, as well as the impact that economies of scale have on both fixed costs and marginal costs.

Cost Minimization & Productive Efficiency

12. Cost Minimization & Productive Efficiency

Companies ultimately want to reduce costs and increase production. The question they must answer is, how to accomplish this task? In this lesson, we will learn about two important terms that are often incorporated with reducing costs and increasing production.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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