In Section 9 we examined the factors that affect con-
sumer choice—the demand side of the supply and de-
mand model. In this section we turn our attention to the
factors that affect producer choice and the supply side
of the supply and demand model. We’ll begin with the
concept of profit and examine profit maximization as
the goal of a firm. We will then investigate the firm’s
production function, which shows the relationship be-
tween the inputs used for production and the output
that is produced. Next we’ll consider the costs that in-
fluence firms’ decisions about supply. The final module
in this section introduces the models of market struc-
ture used to understand how the supply side of the
economy works.Module 52:Defining Profit
Module 53:Profit Maximization
Module 54:The Production Function
Module 55:Firm Costs
Module 56:Long-Run Costs and Economies
of Scale
Module 57:Introduction to Market Structure
Economics by Example:
“Could the Future Cost of Energy Change Life as
We Know It?”
section
Behind the
Supply Curve:
Profit, Production,
and Costs
10
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