Division of labour is the great cause of its increased power, as may be better understood from a particular example, such as pin-making..The effect is similar in all trade and also in the division of employments.

The Firm’s Problem

The Firm’s Decision Process

Opportunity Costs

What Is Profit?

Sunk Costs & Rational Decisions

Production (Q) and Costs

Comparing Costs to Quantity

Production & Costs: Short Run

Short-Run Cost Curves

Short-Run Cost Curves

Why Do Cost Curves Increase?

Diminishing Returns to an Input

The Long-Run Decision: Economies of Scale & LRAC