The upcoming discussion will update you about the difference between short run and long run in theory of production. In the theory of production, we are concerned with how inputs are converted into output. We are also interested in knowing how total product responds to an increasing application of a variable factor, keeping other factors fixed. The key concept here [...]
List of top eleven examples to illustrate the theory of production. Example 1. Suppose that a product requires two inputs for its production. Then is it correct to say that if the prices of the two inputs are equal, optimal behaviour on the part of the producer requires that these inputs be used in equal amounts? Solution. It is not [...]
In this article we will discuss about the Theoretically Analysis of the Production Process. Production Process: The business firm is basically a producing unit it is a technical unit in which inputs are converted into output for sale to consumers, other firms and various government departments. Production is a process in which economic resources or inputs (composed of natural resources [...]