Microeconomics

Major Properties of the Cobb-Douglas Production Function

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In this article, we explain the major properties of the Cobb-Douglas production function Introduction to Cobb Douglas Production Function The Cobb-Douglas production function is an empirical production function developed by Charles W. Cobb (American Mathematician) and Paul H. Douglas (American Economist) based on empirical studies of various manufacturing industries of the USA. This production function …

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The Laws of Returns to Scale

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Introduction The laws of returns to scale explain the input-output relationship under the condition that both the inputs (labor and capital) are variable and their quantity increases proportionately (by same size or proportion) and simultaneously.  When both the inputs labor and capital are increased proportionately, the scale or volume of production also increases. So, the …

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Total Utility, Marginal Utility, and their Relationship

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Concept of Cardinal Utility: Total Utility and Marginal Utility In this article ‘total Utility, marginal Utility, and their relationship’, we try to explain the meaning of total utility, marginal utility, and the relationship between marginal utility and total utility In economics, the term utility refers to ‘the pleasure or satisfaction that individuals get from their …

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Meaning and Types of the Production Function

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Meaning of the Production Function The technical process that links inputs to the output of a good is known as the production function of that good. It is defined as the technological relationship between inputs and output giving the maximum output that can be produced from various input combinations. The production function analyses the relationship …

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Production, Total Product(TP), Average Product(AP), and Marginal Product(MP)

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Meaning of Production In economics, production means the creation of utility for sale. The act of creating utility is done by transferring a set of inputs into some output of good or service. The output has a greater utility than the inputs together. Thus, output or new product created is sold in the market. If …

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