A production function:
A) shows the relationship between a firm's costs and revenues.
B) shows the relationship between production and profits.
C) shows the relationship between inputs and the maximum output that can be produced from those inputs.
D) shows the relationship between variable inputs and fixed inputs.

Question

Quizplus · Accepted Answer

A production function shows the relationship between inputs (such as labor and capital) and the maximum output (or quantity of goods) that can be produced from those inputs. It does not necessarily give information about costs, revenues, profits, or the distinction between variable and fixed inputs.

A Production Function