what is production function??what are its characteristics?????
The production function of a firm depicts the relationship between the inputs used in the production process and the final output produced. Algebraically, a production function is represented as,
Qx = f (L,K)
L represents units of labour used (input 1)
K represents units of capital used (input 2)
Qx represents the unit of output produced
The following are the characteristics of a production function.
- Production function describes the transformation of inputs into final products.
- It involves a combination of inputs that are used for the production of final inputs.
- Production function is associated with a given level of technology.
- The inputs used in the production process (as specified in the production function) are called as factors of production.