The functional relationship between the physical input (or factor of production) and therefore the output is named a production function. It assumed the input as an explanatory or independent variable and the output as a dependent variable. Mathematically, you can write this as:<\/p>\n\n\n\n
Q=f(L,K)<\/p>\n\n\n\n
Where”Q”represents the output,”L”and”K” are the inputs, respectively, labour and capital (such as machinery). Note that there may be many other factors, but we are assuming a two-factor input here. Production functions in the short term and in the long term are different. This distinction is crucial in microeconomics. This distinction is based on the nature of the factor input.<\/p>\n\n\n\n