Free teacher guide · Production, cost and perfect competition

Know where to start. See what to teach next.

Follow the ten-lesson Unit 3 sequence, choose work for your class period, and find the explanation to revisit when an answer reveals a misconception.

Download the four-page teaching guide Explore the lesson map

Free PDF and online guide. No signup required. The complete lesson files are sold separately.

Before the lesson

Find the student task and the teacher explanation.

Open the lesson plan and answer key before the corresponding handout and deck. Keep the key separate from the student copy.
Use _deck.pdf for the fixed-layout projection copy or _deck_EDITABLE.pptx to change presentation text. Use _handout.pdf for students, _key.pdf for model responses, and _plan.pdf for the lesson outline.
Start with U3L01 unless a recent explanation or worked example shows that the earlier ideas are secure. The lesson map follows the included order; later graph work depends on the cost concepts.
Read each problem's own numbers and assumptions. An illustrative graph, a warm-up, and a practice table can use different values.

Use the answer to choose the next move.

Ask for a calculation, graph label, or economic reason before opening the key.

If the answer is incomplete, use the specific return-to reference in the map. Have the learner revise the reasoning, then check another part of the included problem.

Use your judgment about what needs another lesson segment. These prompts are teaching checks, not a validated mastery score or an official AP scoring rubric.

Fit the work to your schedule

Ten lessons can span more than ten meetings.

The source plans include a Do Now, notes, model reading, practice, and an exit check. Their listed activity blocks require about 50-55 minutes before any additional transitions. The 45-minute example therefore selects practice parts and carries unfinished work forward.

Ten lessons do not imply ten class meetings. In particular, U3L07-U3L10 combine paired graphs, short-run and long-run reasoning, or separate scenarios. Keep those stages distinct even if they span meetings.

A 45-minute first pass

Planning examples, not measured completion times.

5 min
Notice and predict
Use the included Do Now; hear one reason.
8 min
Select the needed notes
Focus on terms required for today's check.
10 min
Read the model
Label axes and connect one curve or change to its meaning.
15 min
Attempt selected practice
Use the first-pass parts listed in the lesson map.
5 min
Check and revise
Use the included exit ticket or the map's check.
2 min
Transition
Record the unfinished part and next step.

Selected practice can continue in the next meeting.

A 90-minute block

A block means 90 minutes only in this example. For another bell schedule, preserve the attempt, check, and revision stages and adjust the allocation. A longer block is not an instruction to rush two lessons.

5 min
Retrieve
Return to the prior check or included Do Now.
10 min
Build the concept
Use notes needed for the current problem.
15 min
Read and sketch the model
Explain labels before drawing shifts or areas.
20 min
Attempt the first practice parts
Require calculations and reasons.
5 min
Pause and compare
Compare approaches; identify one disagreement.
15 min
Revise and continue
Use the key to diagnose, then complete the next scenario.
10 min
Complete or extend
Finish remaining parts or explain a changed assumption.
5 min
Check independently
Use an exit response with a short explanation.
5 min
Transition
Record the next teaching move.

When the reason is missing, pause before the next scenario. In a 45-minute first pass, record the remaining practice parts; they still belong to the lesson.

Follow the sequence

Choose a lesson. Look for the reasoning.

File and page references below refer to the complete Unit 3 package. The free guide helps you navigate those materials; it does not contain all student handouts or answer keys.

01Production and marginal product

Separate total output, extra output, and output per worker.

A first pass: Bagel Bay FRQ (a)-(b); carry (c)-(d) forward if needed.
When the reasoning needs another look: Notice whether the response uses total output, the gain from one more worker, or output per worker. Ask the learner to name the measure before explaining diminishing returns.
Return to: Handout p3 table and key p3; for the warm-up, key p1.

02Total and average costs

Choose a total-cost numerator before dividing by output.

A first pass: Maple Leaf FRQ (a)-(b); revisit spreading fixed cost and the flour-price change in (c)-(d).
When the reasoning needs another look: Check whether a total cost or a per-unit cost was requested. Ask which cost belongs in the numerator and what output belongs in the denominator.
Return to: Handout p3 cost data; key p4. Revisit the average-cost model on handout p3.

03Marginal cost and average-cost curves

Connect the next unit's cost to the direction of the average.

A first pass: Tinker Toys FRQ (a)-(b); use (c)-(d) for the next comparison and explanation.
When the reasoning needs another look: Check whether the learner treats minimum marginal cost and minimum average cost as the same point. Ask how a new observation below an average changes that average.
Return to: Handout p3 FRQ and graph; key p3.

04Long-run plant choice

Compare feasible plants at the same quantity.

A first pass: Northland FRQ (a)-(c); reserve (d) for explaining what data are missing at Q=900.
When the reasoning needs another look: Check whether the compared plant costs refer to the same output. Ask what additional information would be needed at a new output.
Return to: Handout p3 Northland prompt; key p3. Keep its numbers separate from the illustrative LRATC graph.

05Economic profit and output choice

Include opportunity cost and distinguish a candidate output from a final production decision.

A first pass: Maya FRQ (a)-(c); use (d) as the follow-up opportunity-cost change.
When the reasoning needs another look: Check whether forgone alternatives are included in economic profit. For output choice, ask what must be compared after identifying a marginal condition.
Return to: Handout p3 Maya prompt and price-taking model; key p3.

06Loss versus shutdown

Compare the loss from operating with the fixed cost still owed after shutdown.

A first pass: Use the supplied model to complete FRQ (b)-(d); finish a separate full sketch for (a) if time is short.
When the reasoning needs another look: If a loss is treated as an automatic shutdown signal, compare the loss from operating with the fixed cost still owed at zero output.
Return to: Handout p3 FRQ and graph; key p3. Add the horizontal P=MR line at $8.

An example from the free task

From the free Lesson 6 activity: operating loses $70; shutting down loses $105 in fixed cost. Compare both choices rather than treating any loss as a reason to stop.

See the graph and full worked answer

07Entry and long-run adjustment

Carry market price across to the firm and separate market Q from firm q.

A first pass: Kale FRQ (a)-(b); carry entry and the increasing-cost contrast in (c)-(d) forward.
When the reasoning needs another look: Check that the market panel sets the price faced by the firm. Ask which quantities describe the whole market and which describe one firm.
Return to: Handout p3 paired graph and FRQ; key p3.

08Surplus and efficiency

Use graph areas and carry the quantity units into dollar amounts.

A first pass: Kale FRQ (a)-(b); follow with total surplus and the efficiency conditions in (c)-(d).
When the reasoning needs another look: Check axis units before computing a surplus area. Ask which assumptions make the competitive benchmark appropriate.
Return to: Handout p3 FRQ and surplus graph; key p3.

09Demand shifts and a separate tax

Complete one scenario before resetting the baseline for another.

A first pass: Apple FRQ (a)-(b); continue (c)-(d), then start the separate constant-cost tax case in (e).
When the reasoning needs another look: Check which baseline and cost assumption apply before each shift. Keep the industry-wide tax separate from the earlier demand change.
Return to: Handout p3 assumptions and part (e); key p4. Use a fresh pair of graphs for the tax.

10Temporary exit and a separate subsidy

Track which firms are affected and which baseline applies.

A first pass: Egg FRQ (a)-(c); start the separate subsidy case (d)-(e) in a later segment or meeting.
When the reasoning needs another look: Check whether the surviving firm is affected by the initial shock. Reset to the stated original equilibrium before treating the subsidy as a separate case.
Return to: Handout p3 scenario and key p3. Keep the outbreak and subsidy on different graph pairs.

Use the complete lesson files

Production, Cost & Perfect Competition

Ten lessons, each with PDF slides, a student handout, an answer key, a lesson plan and an editable PowerPoint deck. Download the free teaching guide separately above.

Review the product details

One-time digital download through Stripe. Delivery and refunds.

Choosing materials or arranging a school purchase?

Ask about your teaching setup.

Tell us the course, class format and timing. If more than one teacher needs the files, ask about permissions before purchasing.

Start a conversation

Ask about your Economics purchase

Prepare a short email below. Review it, then send it from your own email app. Nothing is sent by this page.

Use public business details and general teaching requirements only. Do not include student names, student work, private school materials or confidential information. An inquiry does not join an email list.

Which course? Class format and length optional Timing or purchase question optional How many teachers would use the resources?

To: [email protected]
Subject: Economics purchase assistance

Your email draft review and edit before sending

Open email app

Not sent. You can also copy the draft into an email addressed to [email protected].

No order, payment or delivery commitment is created here. See our privacy policy.

AP is a registered trademark of the College Board, which was not involved in the production of, and does not endorse, this product.