2. Production analysis
Presented by : Nishna Sathyan, K.M

3. Production…
INPUT
OUTPUT

4. Types of products
• Tangible goods
• Intangible goods

5. Classifying inputs…
• Labour
• Capital
• Land
• Raw materials
• Time
• Machinery

6. Types of production…
• Short run production
• Long run production

7. PRODUCTION FUNCTION…
INPUT
OUTPUT
PRODUCTION FUNCTION

8. Types of production function
• production function with one variable input
• production function with two variable input
• production function with all variable input

9. Production function with one variable input
Law of eventually diminishing returns

10. 3 stages of production

11. “ So which stage I have to follow ??? ”

12. Production function with two variable input

13. Isoquant
Derived from the Greek word “iso” meaning equal and
Latin word “quantus” meaning “quantity”

14. Explaining an isoquant…
Labour Capital Output
1 5 100
2 3 100
3 2 100
4 1 100
5 0 100

15. Types of isoquants
• Linear isoquant
• Right angle isoquant
• Convex isoquant

16. Linear isoquant
• Perfect substitutability of input

17. Right angle isoquant
• Non-substitutability of input

18. Convex isoquant
• Non-Perfect substitutability of input

19. Properties of isoquants
• Downward sloping
• Higher isoquant represent
larger output
• No two isoquant intersect
each other
• Isoquant convex to origin

20. Conclusion…
• Production function an economic measure for better
production…

21. References…
• Gupta, G.S (1999 ) “Managerial Economics“ Tata McGraw-Hill
Publishing Company Ltd.
• Dwivedi, D.N(2001) “Managerial Economics“ Vikas Publishing
House Pvt Ltd.

22. One last thing…