• Production is the process of transforming
inputs into output.
• The term ‘production’ means a process by
which tangible and intangible inputs or factors
of production (land, labour, capital, etc) are
converted or transformed to useful tangible
and intangible output.
3. Production Function
The technical relationship between inputs and
output is called production function.
• Mathematically a production function can be
Q = f(K, L, N, T, t , B …) … … … (i)
Q = Output, K = Capital
L = Labor, N = Land
T = Technology, B= Building
t = time
4. Short-run Production Function
Short-run production function refers to the
relationship between output and the variables
factors of production only like labor, raw
materials etc., which can be instantly changed.
• In short-run, labour is supposed to be variable
factor. The firm can change its output by
changing units of variable factor keeping other
factor constant. It can be written as
Qx = f(K ,L)
5. Long-run Production Function
The input-output relationship when the
quantity of all factor input is varied, is known
as long-run production function.
The long-run production function can be
Q = f (L, K, N, T )......(ii)
6. Total Product
• It refers to the total amount of a commodity
produced by the combination of all inputs in a
given period of time.
• Total product is cumulative values of marginal
products. It is defined as follows.
• ⇒ TP = AP × N
N = Total number of inputs employed