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    Productivity and the cost of production

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    Answer the following question in your own words without quoting anyone:

    What is the relationship between productivity and the cost of production, and how does the cost of production vary over the short- and long-run?

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    There is an inverse relationship between physical measures of productivity and cost of production.An increase in the physical productivity of a resource that is used in a production operation reduces the cost of production of a product or service and vice versa.

    The short run (SR) is the period in which the company cannot vary its fixed inputs. Nevertheless, the short run is long enough to allow variation of the ...

    Solution Summary

    The expert examines productivity and the cost of productions.