Difference between revisions of "Production Function"
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+ | == Definition == | ||
+ | A '''Production Function''' denotes an assumption about the response of production oriented economic activities to changing market circumstances (prices for goods and services). A well-known production function in the context of [Input-Output Model]] is the Leontief model, a linear model based on Leontief production functions and a given vector of final demand. The fundamental assumption is fixed input structures | ||
+ | Implicit assumptions are: | ||
+ | * Constant returns to scale | ||
+ | * Sectors use inputs in fixed proportions: Leontief production function | ||
+ | |||
+ | == References == | ||
+ | <references/> | ||
+ | |||
+ | [[Category:EEIO]] |
Latest revision as of 16:36, 28 February 2022
Definition
A Production Function denotes an assumption about the response of production oriented economic activities to changing market circumstances (prices for goods and services). A well-known production function in the context of [Input-Output Model]] is the Leontief model, a linear model based on Leontief production functions and a given vector of final demand. The fundamental assumption is fixed input structures
Implicit assumptions are:
- Constant returns to scale
- Sectors use inputs in fixed proportions: Leontief production function