Sraffa's Production Function

Sraffa's production function describes how different inputs—like labor, capital, and raw materials—combine in production to generate output, without assuming a specific technical relationship. Instead of a formula, it uses matrix equations to show the relationships between inputs and outputs across industries. This approach emphasizes how prices and distribution of income emerge from the structure of these relationships, rather than relying on individual production functions. It highlights the interconnectedness of industries and the importance of relative prices, providing a framework to analyze how economies function and how wealth is distributed without presuming technological progress or diminishing returns.