Production Function
From Open Risk Manual
Revision as of 16:36, 28 February 2022 by Wiki admin (talk | contribs)
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
