is the product of each input, x, raised to a given power. "factors of production," but they are generally designated as either capital or labor. The production function is a statement of the relationship between a firm’s scarce resources (i.e. Production function formula? The production function simply states the quantity of output (q) that a firm can produce as a function of the quantity of inputs to production. Formula: It takes the form f (x 1, x 2, …, x n) = a 0 x 1 a 1 x 2 a 2 … x n a n. The constants a 1 through an … Both graphical and mathematical expressions are presented and demonstrated. Production Function In economics, a production function relates physical output of a production process to physical inputs or factors of production. The output, thus, is a function of inputs. A class of production functions that models situations in which inputs can be substituted for each other to produce the same output, but cannot be substituted at a constant rate, contains functions of the form F (z 1, z 2) = Az 1 u z 2 v for some constants A, u, and v. Such a production function is known as a Cobb-Douglas production function. and organization) or inputs. Here we keep some inputs fixed. Variable Elasticity Substitution Production Function. This means that if we increase every production factor by c, the output level will increase in c β+α. Example: The Cobb-Douglas production function A production function that is the product of each input, x, raised to a given power. Constant Elasticity of Substitution Production Function and 4. Q’ = (K*m) 0.3 (L*m) 0.2 = K 0.3 L 0.2 m 0.5 = Q* m 0.5. ADVERTISEMENTS: Four most important production functions are: 1. The production function is a graphical or mathematical expression showing the relationship between the inputs used in production and the output achieved. If a firm has a production function Q=F(K,L) (that is, the quantity of output (Q) is some function of capital (K) and labor (L)), then if 2Q