Production Function

Economics

Production function refers to the
relationship among units of the factors of production (inputs) and the resultant quantity of a good produced (output).

According to George J. Stigler,
“Production function is the relationship
between inputs of productive services per unit of time and outputs of product per unit of time.”

Production function may be
expressed as: Q = f (N, L, K, T) Where,
Q = Quantity of output, N = Land; L =
Labour; K = Capital; and T = Technology. Depending on the efficiency of the
producer, this production function varies.The function implies that the level of output (Q) depends on the quantities of different inputs (N, L, K, T) available to the firm.

Short-run Production and Long run Production:
In Micro economics, the distinction
between long run and short run is made on the basis of fixed inputs that inhibit the production.

The short-run is the period where
some inputs are variable, while others are fixed. Another feature is that firms do not
enter into the industry and existing firms
may not leave the industry.Long run, on the other hand, is the period featured by the entry of new firms to the industry and the exit of existing firms from the industry.
In general, Production function
may be classified into two:
*Short-run Production Function as illustrated by the Law of Variable Proportions.
*Long-run Production Function as explained by the Laws of Returns to Scale.

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