IT 1081C Lecture Notes - Lecture 15: Marginal Product, Production Function, Danian
Document Summary
Short run production function and long run production function. Difference between short run and long run production function. It is the relationship between physical inputs and physical output which in economics is termed as production function. It thus studies the functional relationship between physical input and physical output of a commodity. It is defined as technological relationship that tells the maximum output producible from various combinations of inputs. Q refers to the quantity of commodity x. In production function, only material inputs or physical inputs are considered in relation to the material or physical output. We do not consider the value of inputs or outputs. Thus production function does not establish any economic relation between inputs and outputs. For example- 50 = f (5 l, 4 k) i. e. 50 units of commodity can be produced by using 5 units of labour and 4 units of capital) Factors of production are classified into fixed factors and variable factors.
