Which of the following is true of a production function?
A)It specifies the maximum feasible output that can be produced for given amounts of inputs.
B)It specifies the maximum revenue that a firm can generate by selling its output.
C)It specifies the amount of goods that can be purchased in a market at a given price.
D)It specifies the expenses a firm can incur as a result of a production process.

Question

Quizplus · Accepted Answer

A production function shows the relationship between inputs (such as labor and capital) and outputs (such as goods or services) and determines the maximum level of output that can be produced for a given combination of inputs. It does not deal with revenue, expenses or market prices.

Which of the Following Is True of a Production Function