AP MicroeconomicsProduction & Costs
Production Function
A production function shows the maximum output a firm can produce from given quantities of inputs.
It links inputs such as labor and capital to output. In the short run at least one input is fixed, which leads to diminishing marginal returns. In the long run all inputs are variable.
Formula / Example
Q = f(L, K), where L is labor and K is capital.
Interactive graph
Production Costs →
Drag the curves and see it for yourself.
Study module
Production and Costs →
Full lesson, practice questions, and flashcards.