Graphical Representation of Production Function
For example, When there are 4 units of labour and 5 units of capital, the equation for the production function is Q = f(4,5).
In the above graph, X-axis represents inputs that are being used in the production process and Y-axis represents outputs that get produced. Q is the Production Function.
Variable Factors are the factors that can be changed during the course of the short run. Variable factors vary with the level of output. An increase in variable factors leads to more production and vice-versa. Employment of variable factors is not required when there is no production. Variable factors include labour, power, fuel, etc.
Fixed Factors are the factors that can not be changed in the short run. The number of fixed factors always remains constant even when is zero production. Fixed factors include land, capital, building, etc.
Note: Production in the short run can only be increased by increasing the variable factor.