Question -
Answer -
The production function of a firm depicts the relationship between the inputs used in the production process and the final output. It specifies how many units of different inputs are needed in order to produce the maximum possible output. Production function is written as:
Qx = f (L, K)
Where
Qx represents units of output x produced.
L represents unitsof labour employed.
K represents unitsof capital employed.
The above equation explains that Qx, units of output x are produced by employing L and K unitsof labour and capital respectively and by a given technology. As the givenlevel of technology appreciates, the output will increase with the same levelof capital and labour units.