Production analysis

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Production analysis

  1. 1. Production analysis Presented by : Nishna Sathyan, K.M
  2. 2. Production… INPUT OUTPUT
  3. 3. Types of products • Tangible goods • Intangible goods
  4. 4. Classifying inputs… • Labour • Capital • Land • Raw materials • Time • Machinery
  5. 5. Types of production… • Short run production • Long run production
  6. 6. PRODUCTION FUNCTION… INPUT OUTPUT PRODUCTION FUNCTION
  7. 7. Types of production function • production function with one variable input • production function with two variable input • production function with all variable input
  8. 8. Production function with one variable input Law of eventually diminishing returns
  9. 9. 3 stages of production
  10. 10. “ So which stage I have to follow ??? ”
  11. 11. Production function with two variable input
  12. 12. Isoquant  Derived from the Greek word “iso” meaning equal and Latin word “quantus” meaning “quantity”
  13. 13. Explaining an isoquant… Labour Capital Output 1 5 100 2 3 100 3 2 100 4 1 100 5 0 100
  14. 14. Types of  isoquants • Linear isoquant • Right angle isoquant • Convex isoquant
  15. 15. Linear isoquant • Perfect substitutability of input
  16. 16. Right angle isoquant • Non-substitutability of input
  17. 17. Convex isoquant • Non-Perfect substitutability of input
  18. 18. Properties of isoquants • Downward sloping • Higher isoquant represent larger output • No two isoquant intersect each other • Isoquant convex to origin
  19. 19. Conclusion… • Production function an economic measure for better production…
  20. 20. References… • Gupta, G.S (1999 ) “Managerial Economics“ Tata McGraw-Hill Publishing Company Ltd. • Dwivedi, D.N(2001) “Managerial Economics“ Vikas Publishing House Pvt Ltd.
  21. 21. One last thing…

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