Production functions

A production function describes how inputs—such as labor, capital, and raw materials—combine to produce a certain amount of output or goods. It shows the relationship between what is put into a process and what comes out. For example, using workers and machines to manufacture cars; the production function helps analyze how changing input levels affects output. It is a tool for understanding efficiency, optimizing resource use, and planning for growth in a business or economy. Essentially, it explains how different resources work together to create products or services.