Theory of Production and Cost

This topic examines the firm's production decisions, covering key concepts in both the short run and long run. In the short run, it explores the production function with one variable input, introducing total product, average product, marginal product, and the law of diminishing returns. In the long run, it introduces isoquants, isocost lines, and the cost-minimizing equilibrium (MRTS = factor price ratio). For Zambian college and diploma students in business, economics, and health management, this knowledge is fundamental for understanding how firms convert inputs into outputs efficiently, how costs behave, and how to achieve optimal production scales, directly applicable to exam questions and managing healthcare service delivery.