ABOUT PRODUCTION FUNCTION

CONCEPT OF PRODUCTION :

                                                     PREPARATION OF SEMI FINISHED GOODS INTO FINISHED GOOD , CALLED PRODUCTION.

FUNCTION : 

                       PROCESS OF WORK ,CALLED FUNCTION.

PRODUCTION FUNCTION: FROM THE MINIMUM INPUT ,THE ABILITY OF PRODUCING MAXIMUM OUTPUT, CALLED PRODUCTION FUNCTION.

                                                          Q = (K ,L)

                          WHERE,

                                          Q = QUANTITY PRODUCE 

                                          K = CAPITAL APPLIED

                                          L  = LABOR

                  NOTE : K IS A FIXED VARIABLE

                                L IS NOT A FIXED VARIABLE 

      

IN A COMPANY PRODUCTION IS DONE ON TWO BASIS ,I.E; LONG TERM AND SHORT TERM.

 

IN SHORT TERM ,  COMPANY DO PRODUCTION IN A FIXED INPUT BECAUSE AT THAT TIME COMPANY DON'T HAVE ABILITY TO PROCURE INPUT.

 

IN LONG TERM  , COMPANY HAS THE ABILITY TO PROCURE MORE INPUT BECAUSE COMPANY HAS MORE TIME.