____________ is the relationship between the variable input and output...
Total product is the relationship between the variable input and output, keeping all other inputs are held constant.
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____________ is the relationship between the variable input and output...
The correct answer is option 'A' - Total product.
Explanation:
In economics, the relationship between the variable input and output is an important concept known as the production function. The production function describes how much output can be produced from a given set of inputs.
1. Total product:
- Total product refers to the total amount of output produced by a firm or an individual producer.
- It represents the relationship between the variable input (e.g., labor) and the resulting output, while keeping all other inputs constant.
- Total product can be measured in physical quantities, such as the number of units produced, or in monetary terms, such as total revenue generated.
- The total product curve shows the relationship between the quantity of the variable input and the total output produced.
- Initially, as more units of the variable input are added, the total product increases at an increasing rate. This is often referred to as the stage of increasing returns to the variable input.
- Eventually, a point is reached where adding more units of the variable input leads to diminishing returns. At this stage, the total product increases at a decreasing rate.
- Finally, if too much of the variable input is added, the total product may start to decline. This is known as the stage of negative returns.
Other options explained:
- Average product: Average product refers to the total product divided by the quantity of the variable input. It represents the average output per unit of the variable input.
- Isoquant: Isoquant is a curve that shows all the combinations of inputs that can produce a given level of output. It represents the different combinations of inputs that can be used to achieve a specific level of production.
- The Long Run: The long run refers to a period of time in which all inputs can be varied. It is a concept used in economics to analyze the behavior of firms and industries over a longer time horizon, where they can adjust their inputs and production processes to achieve optimal efficiency.
In summary, the relationship between the variable input and output, while keeping all other inputs constant, is represented by the total product. It shows how the total amount of output changes as the quantity of the variable input is varied.