Microeconomics: Theory and Applications with Calculus, 4e

6.3 Short-Run Production: One Variable and One Fixed Input

In the short run, we assume that capital is a fixed input and that labor is a variable input, so the firm can increase output only by increasing the amount of labor it uses. In the short run, the firm’s production function is

$$q=f(L,\overline{K}),$$ (6.3)

where q is output, L is workers, and $\overline{K}$[&*obar*{K}&] is the fixed number of units of capital. The short-run production function is also referred to as the total product of labor—the amount of output (or total product) that a given amount of labor can produce holding the quantity of other inputs fixed.

The exact relationship between output or total product and labor is given in Equation 6.3. The marginal product of labor $(M{P}_L)$[&(MP_{L})&] is the ...