production (output per day, week, month, or year) and the period of adjustment 

 allowed for the suppliers to respond to different prices is a critical 

 determinant of the shape of the curve. 



The supply curve usually has an upward slope, though exceptions to this 

 rule are more important than (the corresponding exceptions) for the demand curve. 

 A negatively sloping supply curve may be a consequence of downward sloping supply 

 curves for the individual firms. In this case, the industry may become dominated 

 by the most efficient firm (a monopoly will eventually control output and price). 

 If the supply (marginal cost) curves of the individual firms are upward-sloping, 

 and the negative slope of the industry supply curve reflects economic forces that 

 are external to the individual firms, then the competitive output and price will 

 not be socially efficient. But the industry will tend to be competitive; there 

 are no obvious forces that will cause one firm to control output. 



Production frontier. This is a concave curve that depicts the technologi- 

 cally determined (variation in the) rate of trade-off between goods A and B that 

 society faces. This curve shifts with changes in society's resource endowment. 



Aggregate production possibility set. Given a fixed, finite level of 

 resources, society can produce only finite amounts of any good or finite bundles 

 of goods and services. The specification of the relation between available 

 inputs and attainable outputs designates the aggregate production possibility 

 set. 



Marginal product. The increase in total output from using one additional 

 unit of some specific factor of production holding all other factors of 

 production constant. This increase, except in special cases, is related to the 

 quantity of the other inputs, the level of output, and the quantity used of the 

 factor in question. 



Marginal value product. The increase in the value of the total output from 

 using one additional unit of some factor of production holding all other factors 

 of production constant. If the marginal value of output is a constant 

 independent of the quantity of output there is little distinction between 

 marginal value product and marginal product except for the difference in the 

 units in which they are measured. But if the product or service is unique (such 

 as the services conferred by an outdoor recreation site), there may be a 

 divergence between the two induced by the change in the marginal value of output 

 from the production of an additional unit. 



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