Theory of Production

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Theory of Production

In the previous blog posts the utility and demand of the consumer were analysed. But in a microeconomic model, there is not only a consumer who exercises a demand – there is also a producer. The producers supply goods and services to the consumers. The first economic assumption is maximum profit. The motive of the producer is to make a profit! This motive is valid for the farmer, the shoe-producer, the pharmacists, the hairdresser and any other producer of goods and services.

Watch this video to get a better  perspective on Theory of Production.