Question

What do you understand by Production Function? What are its assumptions? State its uses

in the decision making process.​

Answer 1

Answer:

Assumptions of production function are as follow: Production function is related to a specific time period. The state of technology is fixed during this period of time. The factors of production are divisible into the most viable units. There are only two factors of production, labour and capital.

Explanation:

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Answer 2

Answer:

Production function, in economics, equation that expresses the relationship between the quantities of productive factors (such as labour and capital) used and the amount of product obtained.

Uses of Production Function

Helps in making short-term decisions, such as optimum level of output. Helps in making long-term decisions, such as deciding the production level. Helps in calculating the least cost combination of various factor inputs at a given level of output. Gives logical reasons for making decisions.