output

Examples of output in the following topics:

• Relationship Between Output and Revenue

  • Output can be consumed or used for further production.
  • Output is important on a business and national scale because it is output, not large sums of money, that makes a company or country wealthy.
  • Krispy Kreme's output is donuts.
  • It generates revenue by selling its output.
  • It is however, a profit maximizer, not an output or revenue maximizer.

• Explaining Fluctuations in Output

  • In the short run, output fluctuates with shifts in either aggregate supply or aggregate demand; in the long run, only aggregate supply affects output.
  • In economics, output is the quantity of goods and services produced in a given time period.
  • National output is what makes a country rich, not large amounts of money.
  • Short-run nominal fluctuations result in a change in the output level .
  • The AD curve shifts to the right which increases output and price.

• Defining the Production Function

  • The production function relates the maximum amount of output that can be obtained from a given number of inputs.
  • In economics, a production function relates physical output of a production process to physical inputs or factors of production.
  • This production function says that a firm can produce one unit of output for every unit of capital or labor it employs.
  • For example, the firm could produce 25 units of output by using 25 units of capital and 25 of labor, or it could produce the same 25 units of output with 125 units of labor and only one unit of capital.
  • For example, a firm with five employees will produce five units of output as long as it has at least five units of capital.

• Aggregate Production

  • Production functions assume that the maximum output is attainable from a given set on inputs.
  • Stage 1: the variable input is being used with increasing output per unit.
  • The optimum input/output combination will be reached.
  • The output of both fixed and variable input declines.
  • Aggregate production functions study the short-run inputs and outputs of a firm or economy.

• Production Outputs

  • A firm's production outputs are what it creates using its resources: goods or services.
  • Production outputs are the goods and services created in a given time period, by a firm, industry or country.
  • Production outputs can be anything from crops to technological devices to accounting services.
  • Normal Profit: The average total cost equals the price at the profit-maximizing output.
  • Shutdown: The price is below average variable cost at the profit-maximizing output.

• Total Factor Productivity

  • Instead, it is a residual which accounts for effects on total output not caused by inputs.
  • In the equation above, Y represents total output, K represents capital input, L represents labor input, and alpha and beta are the two inputs' respective shares of output.
  • An increase in K or L will lead to an increase in output.
  • The quantity of inputs used thus does not completely determine the amount of output produced.
  • Total output is not only a function of labor and capital, but also of total factor productivity, a measure of efficiency.

• Other Factors of Production

  • There are three factors of production that are required to produce economic output: land, labor, and capital.
  • Finished goods are the output.
  • Input determines the quantity of output; in other words, output depends upon input.
  • Input is the starting point and output is the end point of a production process and such input-output relationship is called a production function.
  • It is important to note that the final output is the result of the combination of all of the inputs.

• Reasons for and Consequences of Shifts in the Aggregate Demand Curve

  • An increase in any of the four inputs into AD will result in higher real output or an increase in prices.
  • Aggregate Demand/Aggregate Supply Model (AD/AS):The x-axis represents the overall output, while the y-axis represents the price level.
  • For the purpose of this discussion, the key consequences to keep in mind are changes in output and price.
  • However, different levels of economic activity will result in different combinations of output and price increases.
  • However, as the system evolves and aligns itself closer to the highest potential output (optimal utilization of resources or Y*), scarcity will naturally cause the prices to increase more than the overall output in a system.

• Graphical Representations of Production and Cost Relationships

  • In the range from 0 to LA amount of labour, the output increases from 0 to QA.
  • At the maximum of TP (LB amount of labour, output QB) at point B, the VC function will "turn back" and as output decreases the VC will continue to rise.
  • This will be the same output level were the MC is a minimum.
  • The average total cost (ATC) is the total cost per unit of output.
  • In Figure V.5, the AFC is shown declining over the range of output.

• Reasons for and Consequences of Shift in Aggregate Demand

  • A short-run shift in aggregate demand can change the equilibrium price and output level.
  • When an economy gets close to potential output, the price will increase more than the output as the AD rises .
  • When price increase dominates an economy, this means that the economy is near its potential output.
  • It shows how increases and decreases in output and prices impact the economy in the short-run and long-run.
  • The model is also used to show real and potential output.