What are the characteristics of production function?
Answers
It represents a technical relationship between physical input and physical output. It does not take into consideration money cost or price of the output sold.
The state of technical knowledge is assumed to be given and constant. It is possible that the same amount of inputs might produce higher level of output if a better technology is applied in production. Means that the same combination of two or more factors can produce more output with improved technology. It is clear that the production function changes with the change in technology, state of technical knowledge, process of production or organisation of the firm.
It states the maximum quantity of output that can be produced from given quantities of inputs. Alternatively, it shows the minimum quantities of inputs that are required to obtain a given quantity of output.
Production function, like the demand function is considered always with reference to a particular period of time. It expresses a flow of output resulting from a flow of inputs during a definite period of time.
It can be represented in various forms likes by tables; by equations; by total;, average and marginal product curves; by iso-quants.