This document discusses key concepts related to a firm's supply decision including production functions, costs, and profit maximization. It explains that in the short-run a firm has fixed inputs and variable inputs. As the firm increases the variable input, it initially experiences increasing returns to scale but eventually diminishing returns as shown by a downward sloping marginal product curve. The document also discusses short-run costs including fixed costs, variable costs, average costs and marginal costs and how their respective curves are shaped.