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production function |
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production functionEquation that expresses the relationship between the quantities of productive factors (such as labour and capital) used and the amount of product obtained. It states the amount of product that can be obtained from every combination of factors, assuming that the most efficient available methods of production are used. The production function can thus measure the marginal productivity of a particular factor of production and determine the cheapest combination of productive factors that can be used to produce a given output. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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