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# Function of Production The document describes the function of production within a company. **Explanation:** * **Function of Production:** Shows the relationship between a company's production output and the inputs used. * **Inputs:** Labor (L) and Capital (K). * **Short Term:** The company only...

# Function of Production The document describes the function of production within a company. **Explanation:** * **Function of Production:** Shows the relationship between a company's production output and the inputs used. * **Inputs:** Labor (L) and Capital (K). * **Short Term:** The company only decides how many workers to hire. * **Long Term:** The company decides how many workers and how much capital to use. * **Marginal Productivity (PMa):** * **Labor (Work):** Shows how much output increases when one more worker is added. `PMa(L)`. * **Capital:** Shows how much output increases when one more unit of capital is added and represents `PMa(k)`. * **Average Productivity (PMe):** * Calculates the average production output for each unit of input. `PMe(L)` is the labor's average productivity and `PMe(k)` represents the capital's average productivity. The document further explains that this function helps determine the quantity of output a company produces in relation to the resources used. It also indicates how much output changes based on increasing worker or capital units.