About This Chapter
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
|What is Short-Run Production? - Definition & Examples||Learn what short-run production is.|
|Total Product, Average Product & Marginal Product in Economics||Analyze how total product, average product and marginal product differ from one another.|
|Identifying Fixed Costs & Variable Costs for Producers||Study ways to identify fixed cost and variable cost and how they relate to producers in microeconomics.|
|The Law of Diminishing Marginal Returns||Discover how the Law of Diminishing Marginal Returns applies to production.|
|Using the Total Cost Curve to Make Production Decisions in the Short-Run||Learn how to use the Total Cost Curve to make choices in production.|
|Average Cost Vs. Total Cost: Making Production Decisions in the Short-Run||Compare average cost and total cost and learn what they can tell us about production decisions.|
|How Marginal Costs Differ from Average & Total Costs||Learn how marginals differ between average and total costs.|
|Product & Cost Curves: Definitions & Use in Production Possibility Curves||Analyze product and cost curve as a tool to use in production possibility curves.|
|Understanding Long-Run Production Decisions in Economics||Define long-run production decisions as they relate to economics.|
|Short-Run Costs vs. Long-Run Costs in Economics||Examine the differences between short-run costs and long-run costs.|
|What Are Economies of Scale? - Definition & Impact on Fixed Costs||Learn about economies of scale and their impact on fixed cost.|
|Cost Minimization & Productive Efficiency||Analyze the concepts of Cost Minimization and Productive Efficiency and see how they are related.|
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Earning College Credit
Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Transferring credit to the school of your choice
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Other chapters within the AP Microeconomics: Exam Prep course
- Foundational Economic Concepts
- Economic Systems & Structures
- Supply & Demand in Markets
- Elasticity of Markets in Microeconomics
- Microeconomics & Consumer Behavior
- Firm Behavior & Monopoly in Microeconomics
- Factor Markets in Microeconomics
- Public Goods & Government in Microeconomics
- Public Policy, Government & Microeconomics
- AP Microeconomics Flashcards