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In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, goods and services. The utilized amounts of the various inputs determine the quantity of output according to the relationship called the production function .
Production is the process of combining various inputs, both material (such as metal, wood, glass, or plastics) and immaterial (such as plans, or knowledge) in order to create output. Ideally this output will be a good or service which has value and contributes to the utility of individuals. [1]
The more data that is included the more precise the result, however an estimate can be achieved with as few as 17 data points. This should include the normal variety of production conditions, materials, and people in the process. With a manufactured product, it is common to include at least three different production runs, including start-ups.
Unlike the classical political economics theory, the neoclassical economics theory set distribution, pricing, and output all at the same time. All of these variables' "natural" or "equilibrium" values relied heavily on technological conditions of production and were consequently linked to the "attainment of a uniform rate of profits in the ...
If the production set Y can be represented by a production function F whose argument is the input subvector of a production vector, then increasing returns to scale are available if F(λy) > λF(y) for all λ > 1 and F(λy) < λF(y) for all λ<1. A converse condition can be stated for decreasing returns to scale.
The production functions listed below, and their properties are shown for the case of two factors of production, capital (K), and labor (L), mostly for heuristic purposes. These functions and their properties are easily generalizable to include additional factors of production (like land, natural resources, entrepreneurship, etc.)
Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production process, i.e. output per unit of input, typically over a specific period of time. [1]
In economics, output is the quantity and quality of goods or services produced in a given time period, within a given economic network, [1] whether consumed or used for further production. [2] The economic network may be a firm , industry, or nation.