would require her to put in more hours than at the corporate firm. In this case, the lost leisure would also be an

implicit cost that would subtract from economic profits.

Now that we have an idea about the different types of costs, let’s look at cost structures. A firm’s cost structure

in the long run may be different from that in the short run. We turn to that distinction in the next few sections.

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7.2 • Production in the Short Run 161

7.2 Production in the Short Run

LEARNING OBJECTIVES

By the end of this section, you will be able to:

• Understand the concept of a production function

• Differentiate between the different types of inputs or factors in a production function

• Differentiate between fixed and variable inputs

• Differentiate between production in the short run and in the long run

• Differentiate between total and marginal product

• Understand the concept of diminishing marginal productivity
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