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decreasing production function PDF

Added on - 22 Jan 2022

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A decreasing production function is one in which the total output declines when the input increase.
In terms of marginal returns to the variable factor, one could say that it is negative (less than zero).

The decreasing production function could also be divided into three categories on the basis of
increasing, decreasing or constant rate of decrease in output. However, no rational producer will
ever operate in a situation (or stage) of decreasingproduction function i.e., where the total
production declines as the input is increased.

The table 5 shows the decreasing production function: Here, we have started with the 11th dose of
fertilizers and not with the first dose. This is because itwill be rather unrealistic to assume, that
after the very first dose of fertilizers, the output starts decreasing.

The decreasing production function implies a line or a curve with negative slope. The curve can


be concave or convex to the origin depending upon whether the output declines at an increasing
rate or at a decreasing rate when more and more doses of an input are used.

Production functioncan be offour types:

Continuousfunction: The doses or levels of input and out can be split up into small units, e.g.
fertilizers can be applied to o hectare of land in different quantities ranging from a Kg to 100 Kg
and response of yield to different doses can also be measured in different quantities.

Discontinuous function (Discrete production function): Such a function is obtained for input
factors or work units which are used in whole numbers, e.g. one ploughing or number of

Short-run production function: Production function which relates to factors and products where
some resources are fixed.

Long-run production function: Those input-output relations which permit variation in all factors.
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