# Producer Theory Calculus

… a core concept in Economic Analysis and Atlas102

Click for MIT OCW course

### Concept description

Producer theory analyzes the behaviour of producers and firms.

As noted in the Atlas entry, Producer Theory, it is possible to develop a good intuitive understanding of the underlying concepts without a knowledge of calculus. However, in order to develop what the Atlas Examination Standards refer to as an A level comprehension of producer theory, it is necessary to utilize a minimal degree of calculus. This minimal level is used in the  Jonathan Gruber Principles of Microeconomics course in MIT OpenCourseWare (link top right) and detailed links below:

1. Introduction to Producer Theory (at http://ocw.mit.edu/courses/economics/14-01sc-principles-of-microeconomics-fall-2011/unit-3-producer-theory/introduction-to-producer-theory/,) with four chapters:
1. Firm Production Functions (00:11:18)
2. Short Run Production and Diminishing Marginal Product (00:07:04)
3. Long Run Production and the Marginal Rate of Technical Substitution (00:11:03)
4. Returns to Scale (00:07:52)
2. Productivity and Costs (at http://ocw.mit.edu/courses/economics/14-01sc-principles-of-microeconomics-fall-2011/unit-3-producer-theory/productivity-and-costs/) with four chapters:
1. Productivity (00:15:27)
2. Introduction to Costs and Short Run Costs (00:08:45)
3. Long Run Costs (00:15:10)
4. Long Run Expansion Path (00:08:03)
3. Competition I (at http://ocw.mit.edu/courses/economics/14-01sc-principles-of-microeconomics-fall-2011/unit-3-producer-theory/competition-i/) with seven chapters:
1. Introduction to Perfect Competition (00:09:17)
2. Search Theory (00:04:35)
3. Firm Demand vs. Market Demand (00:05:27)
4. Measuring Costs in Profit Maximization (00:07:04)
5. Short Run Profit Maximization in a Competitive Market (00:13:21)
6. Short Run Profit Maximization with Taxation (00:05:26)
7. Short Run Shutdown Decisions (00:03:43)
4. Competition II (at http://ocw.mit.edu/courses/economics/14-01sc-principles-of-microeconomics-fall-2011/unit-3-producer-theory/competition-ii/) with five chapters:
1. Short Run Shutdown Decisions (cont.) (00:06:51)
2. Determining Short Run Market Equilibrium (00:12:29)
3. Long Run Market Equilibrium: Firm Entry and Exit (00:12:34)
4. Long Run Market Supply Curve with Perfect Competition (00:06:15)
5. Long Run Market Supply Curve in Real World (00:11:56)
###### Assessment questions

The following problem set is from MIT OpenCourseWare at http://ocw.mit.edu/courses/economics/14-01sc-principles-of-microeconomics-fall-2011/unit-3-producer-theory/problem-set-4/MIT14_01SCF11_assn04.pdf, accessed 20 May 2016.

The solutions can be viewed by clicking on the image of the solution for problem 1 below (at http://ocw.mit.edu/courses/economics/14-01sc-principles-of-microeconomics-fall-2011/unit-3-producer-theory/problem-set-4/MIT14_01SCF11_soln04.pdf, accessed 20 May 2016):

Click for MIT OpenCourseWare solutions

Source

MIT OpenCourseWare, Producer Theory, at http://ocw.mit.edu/courses/economics/14-01sc-principles-of-microeconomics-fall-2011/unit-3-producer-theory/, accessed 19 May 2016.

Atlas topic and subject

Producer Theory and Competition (core topic) in Economic Analysis.