Production function shows technological or engineering relationship between output of a commodity and its input.In traditional economic theory,it is stated that are four of production.But technology also contributes to the increase in output.Hence,technology may be taken as an additional department of output.Thus,output is a function of land,labour,capital,organisation and technology.
In the worlds of Stigler -"the production function is the name given to the relationship between the rates of outputs of productive services and the rate of output of the product."
Similarly,in the words of Pappas Brigham-"Production function specifies the maximum possible output that can be produced for a given of outputs or,alternatively,the maximum quality of inputs necessary to produce a given level of output."
The production can be expressed symbolically as .
x=f (ld,l,k,m,t)
The above function shows the general production function.In specific situation,one or other of these factor may not be important.The relative importance of factors of production varies from one type of product to another.For example,land is more important in agriculture but not in manufacturing.Similarly,management and technology are more important in industrial production than in agriculture production.For example analysis of production decision problems,it is convenient to assume only two inputs for an output.If labour and capital are only two inputs,the production function is,
X=f (l,k)
This function has three variable i.e. necessary out put of X and units are labour and capital.
Both labour and capital are necessary for production and they are substitutes of each other.The entrepreneur will have to use both of them but would have an option to employ any one combinations of factors out of several possible combinations.The alternative combinations of factors for a given output level be such that if the use one input is increased,that of other will decrease and vice versa.
The alternative combinations of labour and capital for making 10 TV sets per day are illustrated below.
Labour Capital
5 20
6 17
7 15
8 13
9 11
10 10
The table shows that to produce 10 units of TV sets,either 5L and 20 K OR 6L and 7L and 15K etc,can be combined.
In the worlds of Stigler -"the production function is the name given to the relationship between the rates of outputs of productive services and the rate of output of the product."
Similarly,in the words of Pappas Brigham-"Production function specifies the maximum possible output that can be produced for a given of outputs or,alternatively,the maximum quality of inputs necessary to produce a given level of output."
The production can be expressed symbolically as .
x=f (ld,l,k,m,t)
The above function shows the general production function.In specific situation,one or other of these factor may not be important.The relative importance of factors of production varies from one type of product to another.For example,land is more important in agriculture but not in manufacturing.Similarly,management and technology are more important in industrial production than in agriculture production.For example analysis of production decision problems,it is convenient to assume only two inputs for an output.If labour and capital are only two inputs,the production function is,
X=f (l,k)
This function has three variable i.e. necessary out put of X and units are labour and capital.
Both labour and capital are necessary for production and they are substitutes of each other.The entrepreneur will have to use both of them but would have an option to employ any one combinations of factors out of several possible combinations.The alternative combinations of factors for a given output level be such that if the use one input is increased,that of other will decrease and vice versa.
The alternative combinations of labour and capital for making 10 TV sets per day are illustrated below.
Labour Capital
5 20
6 17
7 15
8 13
9 11
10 10
The table shows that to produce 10 units of TV sets,either 5L and 20 K OR 6L and 7L and 15K etc,can be combined.
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