A production function defines the output that can be produced:
A) at the lowest cost, given the inputs available.
B) for the average firm.
C) if the firm is technically efficient.
D) in a given time period if no additional inputs are hired.
E) as technology changes over time.

Question

Quizplus · Accepted Answer

A production function defines the maximum output that can be produced with a given set of inputs when the firm is technically efficient. It does not necessarily reflect the output that can be produced at the lowest cost, the average firm's output, the output in a given time period, or the output as technology changes over time.

A Production Function Defines the Output That Can Be Produced