Neoclassical Production Function

The Neoclassical Production Function describes how different inputs—like labor, capital, and resources—combine to produce output or goods. It assumes that as you add more of each input, output increases, but at a diminishing rate. This means doubling inputs won't necessarily double production, due to efficiency limits. It helps economists understand how firms make decisions about resource use and how technological progress influences productivity. Essentially, it models the relationship between inputs and outputs in a way that captures both their combined effect and the limitations of simply adding more resources.