Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
What are the stages of production?
Expert Solution
Step 1
The production function shows the technical relationship between factor of production and final output. It can be indicated as follows:
Q = F(L, K)
Where,
Q is final output.
L is labor employed.
K is capital employed.
There are three types of production function which are production function following:
- Constant Returns to Scale
- Increasing Returns to Scale
- Decreasing Returns to Scale
The production function following constant returns to scale is termed as the well behaved production function.
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