What is production function?
What is production function?
Question from
Tribhuvan University MGT 207 · Microeconomics for Business 1 paper
Solution
A production function is the technical relationship that shows how the output of a good depends on the quantities of inputs used, given the state of technology.
- General form: with land, labour, capital and organisation it is written Q = f(Ld, L, K, O), and for simplicity often as Q = f(L, K).
- Short run vs long run: in the short run at least one input is fixed (single-variable function, Q = f(L)), while in the long run all inputs vary (Q = f(L, K)); for example, a brick kiln's function describes how much brick comes out for each combination of clay, labour and machinery.
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