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Questions
What is meant by production function?
What is a production function?
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Solution
A production function shows the maximum quantity of a commodity that can be produced per unit of time with the given amount of inputs when the best production technique available is used. It reflects the input-output relationship in production. An example of a production function is P = f(L, La, C, O), where P is the output produced by factor inputs such as land (L), labor (La), capital (C), and organization (O).
Production function can be expressed as follows:
Qx = f(L, K)
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