1. PRODUCTION Understand Long Run V. Short Run
Understand the Stages of Production
Understand Costs

2. Short Run
Only the amount of labor can change
Ex: Hire or fire workers

3. Long Run All factors of production may be changed
Ex: Moving to a new building, changing owners

4. Total Product Changes Add inputs total product goes up
Add too many inputs total product will go down

5. Stages of Production Stage One- Low production
Stage 2- Production grows and hit optimal level
Stage 3- Production falling

6. Fixed Costs Costs incurred just by owning a business
Ex: Salaries, Rent, Taxes

7. Variable Costs Costs that change due to operation or output changes
Ex: Laid off workers, raises, electricity, shipping

8. Total Cost
Add variable and fixed cost together

9. Marginal Cost
Extra cost of producing one additional unit of product

10. DO YOU KNOW? What changes in the short run???
What changes in the long run???
The 4 types of cost???