Production Analysis
Production Analysis
unit 5
Unit 5
Structure
5.1 5.2 Introduction Objectives Meaning of production and production function 5.2.1 Uses of production function 5.2.2 Production function with one variables input case 5.2.3 Production function with two variable input 5.2.4 Long run production function 5.2.5 Economies of scale 5.2.6 Diseconomies of scale 5.2.7 Internalisation of external economies 5.2.8 Externalisation of internal diseconomies 5.2.9 Economies of scope 5.2.10 Diseconomies of scope Self Assessment Questions 1 5.3 Cost of production 5.3.1 Managerial uses of cost analysis 5.3.2 Different kinds of cost concepts 5.3.3 Determinants of costs 5.3.4 Costoutput relationship
Production Analysis
5.3.5 Costoutput relationship and cost curves in the short run 5.3.6 Costout relationship in the long run Self Assessment Question 2 5.4 Summary Terminal Questions Answer to SAQ’s and TQ’s
Sikkim Manipal University
88
Production Analysis
unit 5
5.1. Introduction
A business firm is an economic unit. It is also called as a production unit. Production is one of the most important activities of a firm in the circle of economic activity. The main objective of production is to satisfy the demand for different kinds of goods and services of the community. Learning Objectives: After studying this unit, you should be able to understand the following 1. Understand the concept of production, production function and its managerial uses. 2. Analyze short term and long term production function with illustrations. 3. Describe the various dimensions, advantages and demerits of large scale production. 4. Understand the benefits of joint production of one firm rather if it were to be produced by two different firms. 5. Meaning, different cost concepts and managerial uses of cost of production 6. Understand short run and long run costoutput relationships.
5.2.
unit 5
Unit 5
Structure
5.1 5.2 Introduction Objectives Meaning of production and production function 5.2.1 Uses of production function 5.2.2 Production function with one variables input case 5.2.3 Production function with two variable input 5.2.4 Long run production function 5.2.5 Economies of scale 5.2.6 Diseconomies of scale 5.2.7 Internalisation of external economies 5.2.8 Externalisation of internal diseconomies 5.2.9 Economies of scope 5.2.10 Diseconomies of scope Self Assessment Questions 1 5.3 Cost of production 5.3.1 Managerial uses of cost analysis 5.3.2 Different kinds of cost concepts 5.3.3 Determinants of costs 5.3.4 Costoutput relationship
Production Analysis
5.3.5 Costoutput relationship and cost curves in the short run 5.3.6 Costout relationship in the long run Self Assessment Question 2 5.4 Summary Terminal Questions Answer to SAQ’s and TQ’s
Sikkim Manipal University
88
Production Analysis
unit 5
5.1. Introduction
A business firm is an economic unit. It is also called as a production unit. Production is one of the most important activities of a firm in the circle of economic activity. The main objective of production is to satisfy the demand for different kinds of goods and services of the community. Learning Objectives: After studying this unit, you should be able to understand the following 1. Understand the concept of production, production function and its managerial uses. 2. Analyze short term and long term production function with illustrations. 3. Describe the various dimensions, advantages and demerits of large scale production. 4. Understand the benefits of joint production of one firm rather if it were to be produced by two different firms. 5. Meaning, different cost concepts and managerial uses of cost of production 6. Understand short run and long run costoutput relationships.
5.2.