![]() ![]() ![]() ![]() Two inputs K and L are perfect substitutes in a production function f if they enter as a sum so that f(K, L, x 3, …, xn) = g(K + cL, x 3, …, xn) for a constant c. What is fixed proportion Isoquant?ĭefinition: The Fixed Proportion Production Function, also known as a Leontief Production Function implies that fixed factors of production such as land, labor, raw materials are used to produce a fixed quantity of an output and these production factors cannot be substituted for the other factors.Ĭommon Examples of mixtures are: Salt and sugar, Sand and water, Oil and water, etc. Also, the different combinations of factors can be used to produce the given quantity, thus, one factor can be substituted for the other. What is production function discuss the fixed proportions and variable proportions production functions?ĭefinition: The Variable Proportion Production Function implies that the ratio in which the factors of production such as labor and capital are used is not fixed, and it is variable. In economics, the Leontief production function or fixed proportions production function is a production function that implies the factors of production will be used in fixed (technologically pre-determined) proportions, as there is no substitutability between factors. What is meant by fixed proportion production function? ![]()
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