Micro Notes 5: Production and Cost

At the end of this set of notes, you should be able to explain:

1. Short-run theory of production
2. Short-run theory: Law of Diminishing Marginal Returns
3. Short-run average costs and marginal costs curves
4. Long-run theory: Returns to scale
5. Long-run average cost curve (LRAC)
6. Constructing the LRAC curve
7. Long-run theory: Internal economies/diseconomies of scale
8. Long-run theory: External economies/diseconomies of scale
9. Factors influencing size of firm
10. Methods of growth for a firm

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