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en:production-function

Production Function

Relationship between the output and the combination of factors used to obtain it, in an economic activity.

Production Function Examples

During all the examples, Q is the output quantity per time period and L and K are the inputs quantities per time period.

See more: Linear Production Function.

Linear

Q=aL

Diminishing Returns

Q=aLb 0<b<1

Cobb Douglas

Q=aLbKb

See more about the Cobb-Douglas Production Function.

Perfect Substitutes

Q=aL+bK

Fixed Proportions

Q=min{aL,bK}

Discussion

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