This section of the AP® Microeconomics course covers production and cost analysis both in the short run and in the long run. This section begins with an introduction of the short-run production function, describing the relationship between the quantity of inputs and the quantity of output within the context of the production function. Average and marginal products as well as the law of diminishing marginal returns is covered. The link between productivity and costs, and the relationships among the short-run costs are examined. Economic costs, the revenues of firms and economic profit are explained. Goals other than profit maximization are examined.