Chapter 13

This chapter is about the production of goods and the cost of that production.
Costs and production may vary as they increase.
The amount of goods made may increase at a smaller amount every time another employee is added.
All kinds of costs of production must be taken into account by suppliers to maximize profits.
Industrial organization is the study of how firms' decsions about prices and quantities depend on the market conditions they face.
A firm's average total cost is total cost divided by the quantity of the output, and its marginal cost is the amount by which total cost rises if output increased by 1 unit.