Principles of Microeconomics / Unit 6 MIC 0507 short lesson, about 20 seconds
The Production Function
Captions available
The idea
A production function states how much output a firm gets from given quantities of inputs: labor, capital, land, materials, with technology and the entrepreneur's decisions. Two firms in one industry can have different ones.
In practice
Twenty loaves from one worker and one oven; fifty from two.
Where people slip
It describes what is physically possible, not what is cheap. Costs come once input prices are attached.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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