Production Function:

Definition:

The Production function may be defined as a statement of maximum quantity of output that a firm can produce with any specified quantities of labor, capital, land and entrepreneur etc.

According to R. R. Miller,

"It is a schedule or mathematical equation that gives a maximum quantity of output that can be produced from specified sets of inputs and physical quantities of inputs".

Explanation:

Production function shows a relationship between inputs and outputs. Therefore, the production of goods and services depends upon factors of production i.e., land, labor, capital and entrepreneur. Some factor of production are constant (land and organization) while some factors are variable (labor and capital). The units of variable factors are combined with the fixed factors to get the production of goods and services.

The production function is written as follows:

Q = f (L,K)

Where:

Q  = Quantity o output produced

K = Capital

L = Labor