Explain production and describe production function, Microeconomics

Assignment Help:

The act of production involves the transformation of inputs into output. Production is a transformation of physical inputs into physical inputs into physical output. The output is thus a function of factors which are also called inputs. The functional relationship between physical and physical output and physical output of a firm is known as production function. Algebraically production function can be written as

Q = f (L, K, M)

where, Q stands for the quality of output L, K, and M stand for the quantities of factors labour capital and new raw materials respectively.

The above equation shows that the quantity (Q) of output produced depends upon the quantities of the factors used. The production function expresses the relationship between the quantity of output and the quantities of the various inputs used of the production. More precisely the production function sates the maximum quantity of output that can be produced with any given quantities of various inputs. If a small firm produces wooden tables in a day its production function  will consists of the maximum number of tables that can be produced form a given quantities of various inputs such as wood varnish labour time machine time floor space.

Two things must be noted in respect of production function. First production function like the demand function must be considered with reference to a particular period of time production function expresses a flow of inputs resulting in a flow of output in a specific period of time secondly production function of a firm is determined by the state of technology. When the technology advances the production function changes with the result that greater flow of output can be obtained from the given inputs or smaller quantities of inputs can bemused for producing a given quantity of output.

In economic theory we are interested in two types of production functions. Rest we study the production function when the quantities of some inputs such as capital and land are kept constant and the quantity of one input such as labour (or quantities of few inputs) is varied. This kind of production function [Q = f(L,K)]is called short-run production function. The study of short –run production is the subject matter of the law of diminishing returns which is also called the law of variable proportions secondly we study production funk in (input-output relation) by varying all inputs and this is called long-run production function and can be expressed as Q = f (L, K, M) this forms the subject matter of the law of returns to scale generally the terms constant and increasing returns are used with reference to constant and increasing returns to scale.


Related Discussions:- Explain production and describe production function

Domestic development agenda, Problem : (a) Using examples of Least Deve...

Problem : (a) Using examples of Least Developed Countries, explain the: (i) causes of market failures; and (ii) consequences of market failures (b) Describe the common

Various intermediate quantities, An economy can produce a maximum of either...

An economy can produce a maximum of either 28 million tons of wheat or 7,000 automobiles, or various intermediate quantities, as depicted in the table below:

Market Penetration, Market Penetration: Indian entrepreneurs have to ...

Market Penetration: Indian entrepreneurs have to constantly bear in mind the fast changing trade trends and re-orient their strategies to derive higher yields by way of large

Water meter replacement program, Water Meter Replacement Program: Typi...

Water Meter Replacement Program: Typically water providers install meters at each service address, read meters monthly and charge customers according to their usage. In resid

How it can be possible for increases in the minimum wage, The minimum wage ...

The minimum wage was increased in 1996 amid cries by various economists that it would cause unemployment. Critics shown that the last time the minimum wage went up the si

Graphical representation of various returns, Graphical Representation of Va...

Graphical Representation of Various Returns: Diminishing Returns: If the TP curve is as shown in the adjacent Figure, then the MPL given by tanθ  is throughout less than the A

Production Posibilities Curve, Define the Production Possibilities Curve an...

Define the Production Possibilities Curve and explain the basic economics concepts using the PPC. Explain the factors tht shift the PPC outwards

Macroecon, How might a “perfect” macro equilibrium be affected by (a) a sto...

How might a “perfect” macro equilibrium be affected by (a) a stock market crash; (b) the death of a president; (c) a recession in Canada; (d) a spike in oil prices?

What is the nash equilibrium, i) Two firms, A and B, are operating in a U...

i) Two firms, A and B, are operating in a UK textile industry under duopolistic condition and choose to either produce at "High" price or a "Low" price. Suppose you are the man

Slustky equation, how slustky equation provides neat analytical expression ...

how slustky equation provides neat analytical expression for substitution and income effect?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd