Concept of Production Function Class 11
Production function class 11 notes are presented in this post for students to understand easily. In an economy, consumers and producers are needed for smooth functioning. A producer makes use of various inputs for the production of goods and services. Production is an important activity as it enhances the product’s utility by changing it into the form needed by the consumers. Therefore it is very important to understand the concept of the production function.
Production Function class 11
Production refers to the transformation of inputs into outputs. There exists some relation between the inputs and outputs of a firm. In Economics, such a relationship is known as production function. The production function is an expression of the technological relationship between the physical inputs and outputs of a good. A production function can be an equation, table, or graph showing a maximum amount of a commodity that a firm can produce from a given set of inputs during a period.
The concept of production function describes how a firm uses its factors of production and combines them to produce different output levels. It shows the minimum set of inputs required to produce a given level of output, or it shows the maximum level of output that can be produced with the given level of inputs. Production function can be symbolically written as,
OX = f (i1, i2, i3 …….in)
Where,
OX = Output of commodity X
f = Functional relation
i1, i2, i3 …….in = Inputs needed for OX
Suppose a firm manufactures chairs using two inputs -labour and capital. The production function can be written as,
OChairs = f(L,K)
production function class 11 notes explain the concept of production function it can be defined as the maximum number of chairs that can be produced with the given labour and capital. If the production function is given as 250 = (7L,2K), seven units of labour and two units of capital can produce a maximum of 250 chairs.
A production function either specifies the maximum outputs that can be produced with the given amount of inputs or the minimum inputs required to produce a given level of output. It establishes a technical relationship between inputs and outputs. The production function only includes technically efficient production methods, and no rational consumer will use inefficient methods.
Short Run and Long Run Production Function class 11
Before we move on to short-run and long-run production functions, we need to first take a look at the two types of factors of production – variable factors and fixed factors.
- Variable Factors – Variable factors refer to those factors which can be changed in the short run. They vary directly with the level of output. As output increases, the requirement for variable factors also rises and vice versa. Variable factors are not required in case of zero output. For example, raw materials, casual labor, power, fuel, etc.
- Fixed Factors – Fixed factors refer to those that cannot be changed in the short run. The number of fixed factors remains the same in the short run, irrespective of the output level. They do not change whether the level of output rises, falls, or becomes zero. For example, plant and machinery, buildings, land, etc.
Let us now understand what is meant by short-run and long-run production functions.
Short Run Production Function
Short run refers to a period in which output can be changed by changing only variable factors. In the short run, fixed factors like a plant, machinery, building, etc., cannot be changed. Therefore production can be raised only by increasing variable factors until the extent of the capacity of the fixed factors.
For example, As given in production function class 11 notes if a producer wants to increase output in the short run, he can do so by using more raw materials or increasing the number of workers with the existing factory building, plant, and equipment. One cannot immediately expand the factory building, additional plant, and equipment. So, in the short run, some factors are fixed, and some are variable and fixed factors cannot be changed during such a short period.
The period of the short run is not a fixed time. The period is a rather functional concept that depends on production conditions. It varies from firm to firm and industry to industry.
The short-run production function studies the effect on output due to changes in variable inputs, assuming no change in other factors. As there is a change in variable input only, the ratio between different inputs tends to change at different output levels.
Long Run Production Function class 11
The long run refers to a time in which output can be changed by changing all factors of production. In the long run, there are no fixed factors, as all factors can be varied. In the long run, it is enough for the firm to adjust all its inputs according to changes in the conditions. In the long run, a firm can change its factory size, switch to new production techniques, purchase new machinery, etc. All factors are variable in the long run.
Therefore, if a producer wants to increase his output in the long run, he can do so by changing any of the factors of production, including factory building, plant machinery, etc.
The long-run production function studies the effect on output due to changes in all the factors inputs. As all inputs are variable in the long run, the ratio between different inputs tends to remain the same at different output levels.
Production function class 11 notes give a wholesome definition of the production function. These notes are crucial for reviewing and studying class material so that you better understand it and can prepare appropriately for exams. These notes are efficient and concise and can save you time, energy, and confusion that often results from trying to make sense of disorganized, overwhelming, insufficient, or wordy notes. These notes can provide a great resource for creating outlines and studying.
Unit 6: Producer Behaviour and Supply