Production function shows the maximum amount of output which can be obtained from a given amount of inputs.
Q=K+L
Where
Q is the quantity of output
K is the amount of capital
L is labour used in production
In short run which refers to a short period of time, only labour inputs can be changed. If 100 units is to be produced and there is only 70 units of capital and 20 labours,where capital cannot be changed but labour can be increased from 20 to 30.
In the long run which refers to a long period, both capital and labour can be changed
When 100 units is to be produced both capital and labour can be increased to meet 100 units
Economics when applied to real life sounds beautiful. this blog is for those students who are discovering the different facets of economics applications and want to share their discoveries.
Saturday, August 4, 2018
Production Function
Subscribe to:
Post Comments (Atom)
IMPACT OF SOCIETY /SOCIAL GROUPS ON PURCHASE INTENTIONS OF HOME BUYING- Consumers are the most important factor that will make any bus...
-
Supply in elastic:if the supply is difficult to replace the product by a substitute goods then that is known as supply-in-elastic. Example...
-
MARKET STRUCTURE: there are different market structures that can be characterized to an economy, without market structure any company ca...
-
If the supply is easy to replace by multiple suppliers then it’s known as supply elasticity. Any unskilled worker is an example of supply e...
No comments:
Post a Comment