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Question
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
Qx represents 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.
RELATED QUESTIONS
Define production function.
Distinguish between short-run and long-run production functions.
Let the production function of a firm be `Q=5L^(1/2)K^(1/2)`.
Find out the maximum possible output that the firm can produce with 100 units of L and 100 units of K.
Let the production function of a firm be Q = 2L2 K2.
Find out the maximum possible output that the firm can produce with 5 units of L and 2 units of K. What is the maximum possible output that the firm can produce with zero unit of L and 10 units of K?
Find out the maximum possible output for a firm with zero unit of L and 10 units of K when its production function is Q = 5L = 2K.
What is meant by production function?
The functional relationship between “inputs” and “outputs” is called as
The long-run production function is explained by
A production function measures the relation between
State the production function.
Which statement best describes a production function?
What is the main feature of inputs in the short run?
If only labour can be changed and capital is kept fixed, the firm uses ______.
When all inputs are changed in the same proportion in production, it is known as ______.
What is the dependent variable in the production function Qx = f(f1, f2, ..., fn)?
Returns to scale is the main law studied in which production function?
