Introduction to supply
The supply schedule
a table showing how much a producer will supply at all possible prices
Production function
a graph showing how a change in the amount of a single variable input changes total output
fixed cost
cost that remain the same regardless of production or services offered
total revenue
total amount earned by a firm from the sale of its products
stages of production
phases of production that consist of increasing, decreasing and negative marginal returns
The supply curve
a graph that shows the different amounts of a product supplied over a range of possible prices
short run
production period so short that only variable inputs (usually labor) can be changed
marginal revenue
extra revenue from the sale of one additional unit of output
stage one
increasing marginal returns
Market supply curve
a graph that shows the various amounts offered by all firms over a range of possible prices
Long run
A period long enough for the firm to adjust to the quantities of all productive resources, including capital
variable cost
production cost that change when production levels change
marginal analysis
decision making process that compares the extra cost of doing something to the extra benefits gained
stage 2
decreasing marginal returns
quantity supplied
amount offered for a sale when the price changes
total product
The total output produced by the firm
total cost
the sum of fixed cost and variable cost
profit maximizing quantity of output
level of production where marginal cost is equal to marginal revenue
deminishing returns
stage where output increases at a decreasing rate as more units of variable input are added
change in quantity supplied
change in the amount offered for sale when the prices change
Marginal product
marginal cost
extra cost of producing one additional unit of production
2 key measures of revenue
Marginal revenue and total revenue
stage 3
negative marginal returns