Output
Definition
Output refers to the quantity of goods or services produced by a firm in a given period of time. It is the result of combining inputs such as labor and capital to create a final product.
Analogy
Think of output as the number of pizzas made by a pizza restaurant in one day. The more pizzas they make, the higher their output.
Related terms
Productivity: Productivity measures how efficiently inputs are used to produce output. It is calculated by dividing output by input.
Marginal Product: Marginal product refers to the additional output that is generated when one more unit of input is added while keeping other inputs constant.
Total Cost: Total cost includes all costs incurred by a firm in producing a certain level of output, including fixed costs and variable costs.
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