Use the concepts of production and cost from section 2.2 to explain why NASCAR teams might have to spend far more to move up from an average finish of 2nd to 1st than from 20th to 19th.

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2.2 Output and the Production Function In economics, production refers to the transformation of inputs into output. In this text, we discuss production of sporting events in many different contexts. In this section, we review the basics of production theory, including why these concepts are so important to the study of team sports and the special nature of sports relative to other goods and services. A Note on the Definition of Output Before analyzing a market, economists must determine how to measure output. In some markets, such as the pizza market, defining output (Q) is easy. It is the number of pizzas produced in a given time period. In sports markets, defining and measuring output are more complicated. If we think of output as what a firm sells in order to obtain revenue, we could measure output as attendance or television viewership. Sometimes, it may be more useful to measure output as games, because the team must combine inputs to produce games throughout the course of the season. Finally, if a team's popularity, and hence its revenue, depend on its performance, the appropriate output is wins or winning percentage rather than simply games played. Our problem resembles that facing those who study higher education. From the standpoint of revenue, a college or university may define output as the number of students enrolled. From the standpoint of input utilization, it may define output as the amount that its students learn, perhaps measured by their future incomes. Unfortunately, there is no simple resolution to this issue. To force a universal definition of output would cloud the issue as often as it would clarify it. In this text, we address this thorny issue by defining output according to the actions under consideration. For the remainder of this section, we consider output to be the number of wins produced per season.