Which function tells us the relation between inputs and output?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Production
The production function of a firm is a relationship between inputs used and output produced by the firm. For various quantities of inputs used, it gives the maximum quantity of output that can be produced.
Q=f (L,K)
where
Q = output,
L = labour,
K = capital.