A production function is a straight line because of diminishing returns to labor.

Question

Quizplus · Accepted Answer

A production function does not have to be a straight line. It can take various shapes, such as convex, concave or S-shaped, depending on the technology and inputs used in the production process. The concept of diminishing returns to labor, which states that increasing the amount of labor used while holding other inputs constant will eventually lead to a smaller increase in output, may affect the slope of the production function, but not necessarily its linearity.

A Production Function Is a Straight Line Because of Diminishing