![]() ![]() Production function graphīefore we consider the production function graph, let's consider some data from a made-up company in Table 1 below as an example.Īs mentioned before, the production function shows the relationship between the quantities of inputs and outputs of a company. In that case, we can show the relationship between the inputs (the quantity of labor, the size of the land, and the machinery used) and the quantity of output (the quantity of apple that was produced). Suppose we are to draw a production function for this company. And the output is the number of apples it produces. Here in this example, the farm's inputs are the land, the machinery, and the labor. It is harvesting time, and the firm wants to employ labor to harvest the apples. The farm has around 1000 apple trees already implanted. For simplicity, let's assume that the firm's factors of production are labor, land, and physical capital. ![]() Let's say there is a farming company that plants apples. Price Determination in a Competitive MarketĪ production function is a function that represents the quantity of output a firm can produce given a certain quantity of input combination.Market Equilibrium Consumer and Producer Surplus.Determinants of Price Elasticity of Demand.Cross Price Elasticity of Demand Formula.Effects of Taxes and Subsidies on Market Structures.Monopolistic Competition in the Short Run. ![]()
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