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Class 11 Micro Economics Notes · CBSE

Production Function

Production Function — understanding the technological relationship between physical inputs and output of a good. CBSE Class 11 Microeconomics notes with formula and properties.

Last updated: 25 Aug 2026

Notes

Production Function

Class 11 Microeconomics — The technological relationship between inputs and output

Definition and Formula

Production Function
There exists some relationship between inputs and output of a firm. In Economics, such a relationship is known as production function. Production function is an expression of the technological relation between physical inputs and output of a good.

Production Function

Ox=f(i1,i2,i3,…,in)O_x = f(i_1, i_2, i_3, \ldots, i_n)

Where:

Ox = Output of commodity x

f = Functional relationship

i1, i2, ... in = Inputs needed for Ox

Chair Factory Example: Suppose a firm is manufacturing chairs with two inputs — labour (L) and capital (K). Then the production function can be written as:
OChairs = f(L, K)

Worked Example

If the production function is expressed as: 250 = (7L, 2K), it means 7 units of labour and 2 units of capital can produce a maximum of 250 chairs.

Properties of Production Function

The production function specifies either the maximum output that can be produced with the given inputs, or the minimum quantity of inputs needed to produce a given level of output.

Production function establishes a relation between inputs and output which is technical in nature. It is not economical as we do not consider the value of inputs and output.

Production function is always defined with respect to a given technology. If there is an improvement in the technique of production, then increased output can be obtained with the same physical inputs.

The production function includes only the technically efficient methods of production, as no rational entrepreneur will use inefficient methods.

Production function is expressed with reference to a particular period of time. It changes with different time periods.

Key distinction: The production function is technical, not economic. It does not consider the value or price of inputs and outputs — only the physical relationship.