Define the concept of law of production.
Answers
Explanation:
Laws of Production in economics deals with the concepts of cost and producers equilibrium. It is an important aspect of economics as it helps a business determine the level of output that leads to maximum profits. It also defines the various variable and fixed costs of the firm.
Answer:
The laws of production describe the technically possible ways of increasing the level of production. Output may increase in various ways.
Output can be increased by changing all factors of production. Clearly this is possible only in the long run. Thus the laws of returns to scale refer to the long-run analysis of production.
In the short run output may be increased by using more of the variable factor(s), while capital (and possibly other factors as well) are kept constant.