Question

Define production function. Distinguish between short run and long run production function.

Answer 1

The production function of a firm depicts the relationship between the inputs used in the production process and the final output produced. Algebraically, a production function is represented as,
$Qx=f(L,K)$
Where,
$L$ represents units of labour used (input 1)
$K$ represents units of capital used (input 2)
$Q_x$ represents the unit of output produced

	Short-run Production Function	Long-run Production Function
Basic Factors of production	Under short-run production function at least one of the factors of production remains fixed.	Under long-run production function all factors of production becomes variables.
Production Function	$Q_x=f(L,\overline{K})$ where, $Q_x$ represents units of output $x$ produced $K$ represents Capital units $L$ represents Labour units Bar over $K$ represents that capital remains fixed in the short run	$Q_x=f(L,K)$ where, $Q_x$ represents units of output $x$ produced $K$ represents Capital units $L$ represents Labour units