Costs can decrease in expansion, if people can buy more quantities more cheaply {external economies} {economies of scale, finance}|, plants can specialize, or plants approach full capacity.
Businesses calculate different factor combinations that can produce same amount {isoquant}.
Businesses calculate average total cost compared to business size, find size {optimum scale}| with lowest average total cost, and choose output rate {capacity, output} with lowest total cost.
Businesses calculate average total cost compared to business size {planning curve}, find size with lowest average total cost, and choose output rate with lowest total cost.
The same production units can produce different good or service amounts {production possibilities curve}| {production frontier}.
Businesses calculate demand for production factor {productivity, business}|.
Businesses calculate output value minus material cost {value added}| for production steps.
Factor marginal product decreases if quantity increases relative to other factors {variable proportions law} {law of variable proportions}.
6-Economics-Microeconomics-Finance
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Date Modified: 2022.0225