Production
Department of Computer science and Engineering
CSE 13
2
Project Team Members
Fazle Elahi Fahim
Id-201120030
Tamim Ahmed
Id-201120022
Tamanna Lashker
Id-201120024
Fatema Tuj Zohra
Id-201120021
Presentation submitted to:
Prof. Dr. Azizur Rahman
Department of Economics
Note Dame University Bangladesh
Index
Production Function
ISO production curve
Three law of production
Production Equilibrium
Types of production function
Ridge Line
INTRODUCTION
Production is to create utility of goods and services.
Production is the method of turning raw materials or
inputs into finished goods or products in a
manufacturing process. In other words, it means the
creation of something from basic inputs.
 Production
Function
Q = f ( L,K,N, E, T )
Q = production
F = fonction
L = Labor
K = capital
N = land
E = Entrepreneur
T = Technologie
Simple production fonction
Q = f ( L, K )
//Q is a function of labor and capital.
Q= AL α Kβ
α+β=1
if proportional α+β=1 it does mean that if labor and
capital increases by one unit production con increases by
1unit homogenous production function of degree.
Three law of production
1
Constant return to
scale.
2
Increasing return
to scale.
3
Decreasing return to
scale.
 Types
of production function
On the basis of time production functions are of two types.
 long ran production function.
 Short run production function.

In the long run all factors of productions is changeable, fixed factors, variable
changeable.

In the short run only variable factors Q's changeable.
Q =f (L, K) → Long run.
Q =f (L, K) → short run.
 ISO
production curve
Indicates Different combination of two factors of
production which give some units of Production.
MRTS(L, K)=−ΔL /ΔK​=MPK / ​MPL
K= Capital
L= Labor
MP= Marginal products of each input
ΔL /ΔK=Amount of capital that can be reduced when labor
is increased (typically by one unit)
For example, in the graph of an isoquant where capital
(represented with K on its Y-axis and labor (represented
with L) on its X-axis, the slope of the isoquant, or the MRTS
at any one point, is calculated as dL/dK .
 Production
Equilibrium
The producer will choose some point below
the iso-cost line or along the iso-cost line.
Among this point he will Choose the point
where he will get maximum output or
production. We can see that point E is on the
Possible highest iso-quant line Q2 where he
will get 200 units of production. No other
point will give him as much production as E.
So he will be equilibrium.
 Ridge
Line
MRST=MPL/MPR
The local point of o marginal
productivity of a factor is
called the Ridge line.
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