Asked by Rebekah Gonzalez on Jul 18, 2024
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Process innovation is represented as a downward shift in a firm's total product curve and its average total cost curve.
Process Innovation
The development and use of new or improved production or distribution methods.
Total Product Curve
A graphical representation showing how the total quantity of output produced by a firm varies with the quantity of a single variable input, holding other inputs constant.
Average Total Cost Curve
A graph that represents the total cost of production (fixed and variable costs combined) divided by the quantity of output produced, at various levels of output.
- Differentiate between product and process innovations and their effects on firms' costs and revenues.
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Learning Objectives
- Differentiate between product and process innovations and their effects on firms' costs and revenues.
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