Today we will discuss about concept of production function and its types. It is the functional relationship between physical input and physical output of a commodity.
QX=f (L, K)
30X=f (2L, 10K)
According to it 30 units are produced using 2 units of labour and 10 units of capital. By implying more units of labour say 4 units and 20 units of capital the output could be increased to 60 units.Continue reading “Concept of production function and its types”