Production and cost analysis

Discussion in 'Growing and Managing a Business' started by jorden.william85, May 7, 2011.

  1. jorden.william85

    jorden.william85
    uix_expand uix_collapse
    Member

    Joined:
    Nov 27, 2010
    Messages:
    24
    Likes Received:
    0
    The production function shows the relationship between output and input. The law related to production function are, the law of variables production, returns to scale. During the short period, under the given state of technology and with the given fixed factors, when the units of a variable factor are increased in the production function the total production initially rise more than proportionately to the rise in input and both marginal product and average product will rise. After a certain point the total output will rise less than proportion to the rise in inputs and both marginal product and average product will fall. Eventually, total output will even diminish as marginal product becomes negative.” “In the long run, other things beings equal, as a firm increase the quality of all factors employed, the output rises initially at a more rapid rate than the rate of increases in input, then output increases in the same proportion of input and ultimately output increases less proportionately.”
     
  2. Stephen Ryan

    Stephen Ryan
    uix_expand uix_collapse
    Member

    Joined:
    May 4, 2011
    Messages:
    146
    Likes Received:
    38
    Yes, i would agree with this from my experience in video games production.
    Thanks for the theory.
    Stephen

     

Share This Page