Theory of production, Microeconomics

THEORY OF PRODUCTION:

Production activities related to goods and services require inputs. Typically, the set of inputs includes labour, capital equipments and raw materials. The producing unit usually has to solve the choice problem as a given amount of output can be produced from various combinations of inputs. Firms, therefore, look for production possibilities that are technologically feasible. A production function describes the relation between input and output with a given the technology. More formally, it shows the maximum amount of output that can be produced from any specified set of inputs, given the existing technology. If we assume that there are only two factors of production - labour (L), capital (K) and a single output q, mathematically a production function can be written as, 

q = F(L, K)  

Posted Date: 10/26/2012 5:58:23 AM | Location : United States







Related Discussions:- Theory of production, Assignment Help, Ask Question on Theory of production, Get Answer, Expert's Help, Theory of production Discussions

Write discussion on Theory of production
Your posts are moderated
Related Questions


Non-Tradable:Some products can't be transported over long distances or otherwise sold to consumers from far-off locations. These products (including some goods as well as most serv

Non-existence of Objective Probability Distributions :   Let us see why expectations are volatile in nature? According to Keynes (1936, pp. 149): "Our knowledge of the fact

Question: (a) With the help of diagrams, explain how the price and quantity demanded or supplied of fuel will change under the different scenarios: (i) Consumers expect a fu

How base case NPV analysis is applied in financial risk management


Costs: If raw materials, machines and other things required for production could be made available freely then the study of the theory of the production and indeed, the study of

what is the application of consumer surplus