production function

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production function

a function that shows for a given state of technological knowledge the relationship between physical quantities of FACTOR INPUTS and the physical quantities of OUTPUT involved in producing a good or service. Since the quantity of output depends upon the quantities of inputs used, the relationship can be depicted in the form of FUNCTIONAL NOTATION:

where Q = output of a product and I1 I2, etc., are quantities of the various factor inputs 1, 2, etc., used in producing that output.

It is important to emphasize that factor inputs can be combined in a number of different ways to produce the same amount of output. One method may employ large amounts of capital and only small amounts of labour, while another method may employ large quantities of labour and only a little capital. In physical terms, the method that is technically the most efficient is the one that uses the fewest inputs. Economists, however, are more concerned with the cost aspects of the input-output relationship (see COST FUNCTION), specifically the least costly way of producing a given output. Such relationships can be analysed using ISOQUANT CURVES, ISOQUANT MAPS and PROCESS RAYS.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
A special case of production function implying zero substitutability between inputs is the Leontief technology [18, p.
(2014) conducted their study in Punjab and they used Cobb-Douglas Production function to determine factor affecting rose cut flower productivity.
Notice that an inflection point [k.sub.f] exists such that f([k.sub.t]) is convex for [k.sub.t] [member of] (0, [k.sub.f]) and it is concave for k [member of] ([k.sub.f], +[infinity]) with [k.sub.f] = [(([rho] - 1)/[beta]([rho] + 1)).sup.1/[rho]], so it is a convex-concave production function. Such a function can be considered an extension of the Cobb-Douglas (CD) production function, since it approximates the CD case when [alpha] = 1 and [beta] = 0.
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While the efficiency limit is considered as 1 in the Data Envelopment Analysis, in the Stochastic Frontier Analysis, it is determined based on production function. So, the highest result is not 1 in the Stochastic Frontier method.
Chaudhry (2009) discussed the TFP in Pakistan using the Cobb-Douglas production function (CD-PF) and trans-log production function.
The present study attempts to analyze the productivity and production function in India's manufacturing sector with particular reference to the performance of government department enterprises.
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Of course, regulation function is a technique to be determined by the production function. Difference between earnings from the product sales and cost of the production factors form its benefits.
The Aggregate Production Function and the Measurement of Technical Change: 'Not Even Wrong'

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