Chapter 4: Production Economics (Extra)
This video expands on the discussion of production economics in the video associated with Section 4.1 in Chapter 4 of the text Economic Essentials for Business, Management and Engineering. It provides a brief addition to the production lectures and constitutes an application of the notion of an expansion path. The expansion path requires that the price of a given input must equal the value of the marginal product associated with that input. When the price of output or that of the input, the analysis shows what the proper response of the firm should be. This information is useful when we examine rent in the forestry sector in a later lecture.