Short-Run Production: In describing a short-run production function it is useful to begin with a long-run functional form and then discuss how the short-run version is a simplification with one (or more) of the inputs held constant.

 

When explaining average and marginal product it is a good idea to emphasize two things.  First, both average and marginal product are measures of productivity – each taking a different perspective on the question of how much output is produced by a given input.  Second, emphasizing that average product is just an average and marginal means ‘extra’ will pay off in the chapter on cost where the same concepts are applied to the cost function.

 

Finally, the most important concept in this section is the Law of Diminishing Marginal Returns.  It is important to clearly state the relationship: adding more of a single input while holding other inputs fixed will eventually lead to a decrease in marginal productivity of the variable input.