A production function tells the firm
A)the maximum output it can expect to produce with a given mix of inputs.
B)the average output it can expect to produce with a given mix of inputs.
C)the minimum output it can expect to produce with a given mix of inputs.
D)the average level of production for other firms in the industry.

Question

Quizplus · Accepted Answer

A production function shows the maximum output a firm can produce using a given combination of inputs, such as labor and capital. It does not show the average or minimum output, nor does it compare a firm's output to others in the industry.

A Production Function Tells the Firm