Which of the following statements best describes a production function?
A)The maximum profit generated from given levels of inputs.
B)The maximum level of output generated from given levels of inputs.
C)All levels of output that can be generated from given levels of inputs.
D)All levels of inputs that could produce a given level of output.

Question

Quizplus · Accepted Answer

A production function describes the maximum level of output that can be generated from given levels of inputs. It shows the relationship between inputs (such as labor and capital) and output, holding all other factors constant. The production function can help firms determine the most efficient way to produce a given level of output, and can also help policymakers understand the relationship between inputs and output in the economy.

Which of the Following Statements Best Describes a Production Function