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Production

Production. Returns to Scale, Productivity and Production. K = Capital L = Labor. I: Increasing Returns. Each increase in an input leads to proportionately more increase in output. III: Decreasing Returns. II: Diminishing Returns.

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Production

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  1. Production Returns to Scale, Productivity and Production

  2. K = Capital L = Labor

  3. I: Increasing Returns Each increase in an input leads to proportionately more increase in output III: Decreasing Returns II: Diminishing Returns Each increase in an input leads to a decline in output Each increase in an input leads to proportionately less increase in output

  4. 60 cents 50 cents (Most Productive) 53 cents

  5. PRODUCTION Businesses produce and sell goods so they can make profits Profit = Π Π = Revenues - Costs

  6. PRICE

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