Factor and product relationship questions

factor and product relationship questions

AN ANALYSIS OF FACTOR PRODUCT RELATIONSHIP. IN PRAWN .. problems encountered in it and as far as the exp erience of the fa rm ers under the. Differentiate among the three types of production relationships o Factor – product , The study of the factor-factor relationship one of the five economic problems. 1Production function. Overview. 3 types of relationships. 2The factor-product relationship. overview. MP and AP. 3The factor-factor relationship.

Product Relationship in Dynamics 365

Another alternative is to buy plenty of steel and hire plenty of workers, but two matters limit this strategy -- the size of the facility and the amount of cash. These two matters are the fixed inputs and cannot be altered during the production period. These formulas focuses the manager's attention on the relationship between the quantity of output produced MPP and the cost of the variable input Px.

factor and product relationship questions

Due to the reality of diminishing marginal productivity, the MPP for both inputs changes as more variable input is used. The manager does not want to use so much of one input and so little of the other input that neither of the levels of use is close to being the profit maximizing combination of inputs. However, the manager also needs to consider the relative cost of each variable input. Accordingly, the manager considers how adjusting the relative quantity of the variable input impacts total production of the output and the relative cost of the variable inputs.

This mathematical statement is based on the premise that there is a production function for the steel and for labor; that is, how much output is there for the steel and how much output is there for the labor.

In these two disjointed relationship that is, the relationship between steel and output is presumably not impacted by the amount of labor, and the production function for labor is presumably not impacted by the availability of steelthere is an individual production function for each variable input. The primary fixed input for the individual production functions for steel and labor is presumed to be the manufacturing facility, not the cash.

This is based on the assumption that even though the business is profitable and there is room to expand, there is no opportunity during this production period to acquire more cash with which to purchase more variable inputs. A firm has to pay for the inputs it needs.

Therefore, inputs, on the one hand, generate costs and, on the other hand, generate output. We first study the relationship between inputs and the output; that is "production function". Then we look at the relationship between the output and costs; that is cost function.

factor and product relationship questions

Studying the relationship between costs and inputs without regard to the output produced from the inputs is not useful. That is why we study the relationship between costs and output.

Factors of Production The primary factors of production are land and labor. Capital is another important factor of production.

Production function

In economics we distinguish between physical capital and financial capital. Non-physical assets such as copy rights and patent rights are functionally similar to physical capital. Financial assets representing physical capital stocks or used to acquire physical capital are financial capital. In addition to land, labor and capital businesses often use intermediate goods raw materials and supplies in the production process.

Production function | economics | guiadeayuntamientos.info

In market economies the function of entrepreneurs is also very important. The function of an entrepreneur is to acquire and combine all the needed factors of production to produce a good. An entrepreneur takes chances risks in the hope of making profits. Cost of production is simply the sum of the costs of all inputs used in production. It is rather based on the degree of the variability of inputs.

In the short run at least one of the factors of production remains unchanged fixed. In the long run all factors of production are variable. In a two-input production process, in the short run, only one input is variable.