Rationality of Choices Made by Individual Producers

Krzysztof Malaga () and Karolina Sobczak ()
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Krzysztof Malaga: Poznań University of Economics and Business
Karolina Sobczak: Poznań University of Economics and Business

Chapter Chapter 4 in Microeconomics, 2022, pp 159-287 from Springer

Abstract: Abstract This chapter is devoted to the description of rational behaviour of a single producer. It presents basic concepts of theory of the firm that relate to the production processProductionprocess and financial aspects. Analysis of problems of profit maximizationProblem ofoptimizationproblems of profit maximization and production cost minimizationProblem ofproduction cost minimization shows how a producer choosesProductionfactors optimal inputsProductioninputs of production factorsOptimalinputs of production factors and optimal supply of a product. The reader learns what is the difference between solutions to these problems in case of long-termStrategy of firmlong-term and short-termStrategy of firmshort-term strategies of the firm’s activity. Each problem is presented in the static as well as in the dynamic approach. The chapter discusses also a function of demand for production factorsFunctionof demand for production factors and a supply function that result from optimization problems of a producer.

Date: 2022
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DOI: 10.1007/978-3-031-10554-8_4

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