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Explain the Concept of a Production Function. - Economics

Short Note

Explain the concept of a production function.

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Solution

The production function of a firm depicts the relationship between the inputs used in the production process and the final output. It specifies how many units of different inputs are needed in order to produce the maximum possible output. Production function is written as:

Qx = f (L, K)

Where

Qrepresents units of output x produced.

L represents units of labour employed.

K represents units of capital employed.

The above equation explains that Qx, units of output x are produced by employing L and K units of labour and capital respectively and by a given technology. As the given level of technology appreciates, the output will increase with the same level of capital and labour units.

Concept: Meaning of Production Function
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APPEARS IN

NCERT Class 12 Economics Introductory Microeconomics
Chapter 3 Production And Costs
Exercise | Q 1 | Page 50
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