Home » Production Function

# Production Function:

## What is Production Function?

Production of goods requires resources or inputs. These inputs are called factors of production named as land, labor, capital and organization. Continue reading.

## Short Period Analysis of Production:

The short run is a period of time in which only one input (say labor) is allowed to vary while other inputs land and capital are held fixed. In the short run, therefore, production can be increased with one variable factor and other factors remaining constant. Continue reading.

## Long Run Production With Variable Inputs:

The long run is the lengthy period of time during with all inputs can be varied. There are no fixed output in the long run. All factors of production are variable inputs. Continue reading.

## Isoquants:

The word 'iso' is of Greek origin and means equal or same and 'quant' means quantity. An isoquant may be defined as a curve showing all the various combinations of two factors that can produce a given level of output. Continue reading.

## Properties of Isoquants:

The main properties of the isoquants are similar to those of indifference curves. These properties are now discussed in brief. Continue reading.

## Isocost Lines:

A firm can produce a given level of output using efficiently different combinations of two inputs. For choosing efficient combination of the inputs, the producer selects that combination of factors which has the lower cost of production. Continue reading.

## Marginal Rate of Technical Substitution:

Prof. R.G.D. Alien and J.R. Hicks introduced the concept of MRS (marginal rate of substitution) in the theory of demand. The similar concept is used in the explanation of producers equilibrium and is named as marginal rate of technical substitution (MRTS). Continue reading.

## Optimum Factor Combination:

In the long run, all factors of production can be varied. The profit maximization firm will choose the least cost combination of factors to produce at any given level of output. The least cost combination or the optimum factor combination refers to the combination of factors with which a firm can produce a specific quantity of output at the lowest possible cost. Continue reading.

 Principles and Theories of Micro Economics Definition and Explanation of Economics Theory of Consumer Behavior Indifference Curve Analysis of Consumer's Equilibrium Theory of Demand Theory of Supply Elasticity of Demand Elasticity of Supply Equilibrium of Demand and Supply Economic Resources Scale of Production Laws of Returns Production Function Cost Analysis Various Revenue Concepts Price and output Determination Under Perfect Competition Price and Output Determination Under Monopoly Price and Output Determination Under Monopolistic/Imperfect Competition Theory of Factor Pricing OR Theory of Distribution Rent Wages Interest Profits
 Principles and Theories of Macro Economics National Income and Its Measurement Principles of Public Finance Public Revenue and Taxation National Debt and Income Determination Fiscal Policy Determinants of the Level of National Income and Employment Determination of National Income Theories of Employment Theory of International Trade Balance of Payments Commercial Policy
 Development and Planning Economics Introduction to Development Economics Features of Developing Countries Economic Development and Economic Growth Theories of Under Development Theories of Economic Growth Agriculture and Economic Development Monetary Economics and Public Finance History of Money