Production and Cost Every profit-maximizing producer must understand how much it will cost to increase production. The production functionthe relationship between the maximum amounts of output a firm can produce and various quantities of inputsand its relationship to costs solves this problem for producers. In this activity you will be introduced to marginal product and the law of diminishing returns from a graphical perspective. You will also learn about total cost, average variable cost (AVC), and average total cost(ATC) and discover how a profit maximizing firm to chooses how much to produce. The activity will focus on the following learning objectives: Analyze the relationship between inputs and the resulting outputs for a firm, including the law of diminishing returns. Analyze the relationship between output and both total and average costs. Explain the relationship between marginal product and marginal costs. The law of diminishing returns states that the production function is a downward sloping curve. True False TOTAL SCORE: 0/13