Which of the following changes a firm's production function?
A) hiring additional workers
B) acquiring additional physical capital
C) adding a second production facility exactly like its first production site
D) adopting new technology

Question

Quizplus · Accepted Answer

Adopting new technology can significantly change a firm's production function by increasing productivity, improving efficiency, and enabling the production of new products. Hiring additional workers (A) and acquiring additional physical capital (B) can increase output in the short run, but they do not necessarily change the production function. Adding a second production facility (C) can increase capacity, but it does not necessarily change the production function unless the facility is built with new technology or a different production process.

Which of the Following Changes a Firm's Production Function