PRODUCTION FUNCTION

The production function is the key concept of production theory because it is the link between input usage and an attainable level of output. It describes the relation between physical rates of input usage and its rate of output. With a given state of technology, the attainable level of output depends largely, but not entirely upon the quantities of the various inputs employed in the production process.
A production function is usually defined as a schedule (or equation, table, or graph) showing the maximum output of a commodity that can be produced per period of time from a fixed amount of resources, given the existing technology or the art of production. In sort, the production function is a catalog of a firm’s output possibilities.