Production
is the process by which inputs are transformed in to outputs. Thus there is
relation between input and output. The functional relationship between input
and output is known as production function. The production function states the
maximum quantity of output which can be produced from any selected combination
of inputs. In other words, it states the minimum quantities of input that are
necessary to produce a given quantity of output.
The
production function is largely determined by the level of technology. The
production function varies with the changes in technology. Whenever technology
improves, a new production function comes into existence. Therefore, in the
modern times the output depends not only on traditional factors of production but
also on the level of technology.
The
production function can be expressed in an equation in which the output is the
dependent variable and inputs are the independent variables. The equation is
expressed as follows:
Q=
f (L, K, T……………n)
Where,
Q
= output
L
= labour
K
= capital
T
= level of technology
n
= other inputs employed in production.
There
are two types of production function - short run production function and long
run production function. In the short run production function the quantity of
only one input varies while all other inputs remain constant. In the long run
production function all inputs are variable.