Production, costs, and pricing.html



In microeconomics, industrial organization is the field which describes the behavior of firms in the marketplace with regard to production, pricing, employment and other decisions. Topics in this field range from classical issues such as opportunity cost to neoclassical concepts such as factors of production.

List of topics

• Production theory basics
  • production efficiency
  • factors of production
  • total, average, and marginal product curves
  • marginal productivity
  • isoquants & isocosts
  • the marginal rate of technical substitution
• Economic rent
  • classical factor rents
  • Paretian factor rents
• Production possibility frontier
  • what products are possible given a set of resources
  • the trade-off between producing one product rather than another
  • the marginal rate of transformation
• Production function
  • inputs
  • diminishing returns to inputs
  • the stages of production
  • shifts in a production function
• Cost theory
  • the different types of costs
    • opportunity cost
    • accounting cost or historical costs
    • transaction cost
    • sunk cost
    • marginal cost
  • the isocost line
• Cost-of-production theory of value
• Long-run cost and production functions
  • long-run average cost
  • long-run production function and efficiency
  • returns to scale and isoclines
  • minimum efficient scale
  • plant capacity
• Economies of density
• Economies of scale
  • the efficiency consequences of increasing or decreasing the level of production
• Economies of scope
  • the efficiency consequences of increasing or decreasing the number of different types of products produced, promoted, and distributed
• Optimum factor allocation
  • output elasticity of factor costs
  • marginal revenue product
  • marginal resource cost
• Pricing
  • various aspects of the pricing decision
• Transfer pricing
  • selling within a multi-divisional company
• Joint product pricing
  • price setting when two products are linked
• Price discrimination
  • different prices to different buyers
  • types of price discrimination
  • yield management
• Price skimming
  • price discrimination over time
• Two part tariffs
  • charging a price composed of two parts, usually an initial fee and an ongoing fee
• Price points
  • the effects of a non-linear demand curve on pricing
• Cost-plus pricing
  • a markup is applied to a cost term in order to calculate price
  • cost-plus pricing with elasticity considerations
  • cost plus pricing is often used along with break even analysis
• Rate of return pricing
  • calculate price based on the required rate of return on investment, or rate of return on sales
• Profit maximization
  • determining the optimum price and quantity
  • the totals approach
  • the marginal approach of production

See also

• Industrial organization
• Important publications in production theory
• Microeconomics
• Production run