The production function shows
A)the total cost of producing a given quantity of output.
B)the maximum output that can be produced from a set of inputs.
C)the technology used to produce output.
D)the incremental output gained by improving the production process.

Question

Quizplus · Accepted Answer

The production function shows the maximum output that can be produced from a set of inputs. It is a mathematical function that relates the quantity of inputs used to produce a certain quantity of output. The production function helps firms to determine the most efficient way to produce a given level of output, given the prices of inputs and the available technology.

The Production Function Shows