Assignment
Economists use the theory of the firm to analyze the choices that business institutions make to produce and supply economic goods. In some detail explain the process of developing supply functions and all the steps that must be taken to develop supply functions. You must begin with a production function and proceed to develop a cost function. Assume that all firms seek to produce their output at the lowest possible cost and focus on how costs may differ between the short-run and the long-run. Assume that business firms make output choices so as to maximize profits. With that assumption, investigate the firm's supply decision.
Use both mathematical and intuitive analyses to indicate the ways of modeling the physical relationship between inputs and outputs (production function). Use the production function to discuss and derive cost functions and investigate the firm's supply decision. In your investigation, describe the three outcomes of profit maximizing behavior.
This assignment requires a comprehensive analysis of the theories of production, costs, profit maximization, and supply. Your responses must cover all the different aspects of these theories.
The length of your discussions should be within ten pages long. Please avoid large fonts (more than 12) and submit them to me in an MS Word file on or before August 1, 2017.