Analyzing The Concepts Of Production And Cost

892 Words May 22nd, 2016 4 Pages
Purpose: Introduction/background of problem

In this case study it is required that the students analyze the concepts of production and

cost in the short and long run. The objective of both concepts is to determine the decision making

process in relation to the profit maximizing. The concept of short run usually has at least one

factor of production fixed during the decision making time frame. This concept suggests that the

short run would have no impact on the overall decision. The long run concept is the opposite of

the short run in this concept all the quantities of input can be varied. There are eight case studies

that have been presented to us with various information that require calculation.


In table one our objective is to determine the weekly output of bicycles at Al`s Bicycle Town.

The table outline the total product, average product of labor, marginal product of labor and labor.

The excel spreadsheet below outline the weekly outputs of Al`s Bicycle Town and provide a graph that displays the data.
In order to help determine where the average product of labor and marginal product of the labor cost curve cross we must determine where their paths cross on the graph. Looking at the table and graph it is easy to see that the AP and MP curve cross at 100 with 1 labor and 150 with 3 labors. Average product measures your productivity with a particular number of workers. To calculate the average product, you need the total product (Mack, 2016).…
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