The production function
A) gives the maximum amount of output for a given level of inputs.
B) gives the implicit costs for all inputs.
C) gives the amount of time necessary to reach the long run.
D) allows us to compute the difference between accounting and economic profits.

Question

Quizplus · Accepted Answer

The production function gives the maximum amount of output that can be produced with given inputs. It shows the relationship between inputs (land, labor, capital) and the maximum output that can be produced with each combination of inputs. The production function helps firms to determine the most efficient way to produce goods and services.

The Production Function