Firms and Their Production Decisions
2 years ago
Microeconomics
Factors of production – Inputs into the production process (eg. Labor, capital, and materials).
Production function – Function showing the highest output that a firm can produce for every specified combination of inputs.
q = F(K, L)
**As technology becomes more advanced the production function changes, since more can be produced in less time.
Short run – Period of time in which quantities of one or more production factors cannot be changed.
Long run – Amount of time needed to make all production inputs variable.
Fixed input – Production factor that cannot be varied.
Bijay Satyal
Dec 1, 2021