Approach To Production Function

Production is the transformation of raw materials into finished goods. It is the total output that is achieved by the combination of a chosen pool of inputs.  The production function can be mathematically written as :
               Q=f(x1,x2,......xk)
                        Where,
                      Q=output
              x1,x2,.......xk= inputs
For our current analysis let's reduce the inputs to two, capital (K) and Labour(L)
                         Q=f(L,K)
Uses
✓To obtain total maximum output .
✓Helps the producers to determine     whether employing the valuable inputs are profitable or not.
✓To make a combination of inputs so as to gain the maximum output.

Fixed inputs
They are the factors that are independent of the output of the firm in the short run and remain unchanged .Example: machines, factory building , plants etc.

Variable inputs
They are the factors that change with the output of the firm in the short run Example: labour, fuel ,power etc.

Total product (TP)
Maximum output that can be achieved at a given specific period of time by increasing or decreasing the quantity of variable factors.

Average product (AP)
Is equal to total product divided by the amount of input used to produce that total product.
           AP=TP/Total inputs

Marginal product (MP)
It is the amount that is added to total product when there is increase of one unit of a single input, given that the other inputs are constant.
                  MP=WQ/WL
                       Where,
          W =change in input