Long-Run Production: The presentation of long-run production parallels the discussion of consumer theory from the previous chapter.  Students will quickly see the similarities, but it is important to note the differences as well.  One difference is that the long-run production function, unlike the utility function, is cardinal.  The value of the production function is given in physical units, not the abstract notion of utility associated with a utility function.  In addition, there are differences in terminology between the two models (indifference curve vs. isoquant, marginal rate of substitution vs. marginal rate of technical substitution).

 

The special cases exist in this model as well and, as with consumer theory, are worth the time spent because they are very helpful in emphasizing the intuition of the model.