Question

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

Answer 1

Production function refers to the functional relationship between (physical) inputs and (physical) output.

$\begin{array}{cccc}& \text{Short Period Production Function}& \text{Long Period Production Function}& \\ \left(i\right)& \text{Some factors are variable}& Allfactorsarevariable.& \\ & \text{while others are fixed}& & \\ \left(ii\right)& \text{Short period production}& \text{Long period production}& \\ & \text{function is of variable}& \text{function is of constant}& \\ & \text{proportions type.}& \text{proportions type.}& \\ \left(iii\right)& \text{Scale of output remains}& \text{Scale of output changes.}& \\ & \text{constant.}& & \\ \left(iv\right)& \text{Behaviour of output is}& \text{Behaviour of output is}& \\ & \text{studied with reference to}& \text{studied with reference to}& \\ & \text{'Returns to a factor' or}& \text{'Returns to Scale'.}& \\ & \text{'Law of Variable Proportions'.}& & \end{array}$