Production function: Distinguish between a short-run and a long-run production. Production involves transformation of inputs into outputs. The output is a function of input. The functional relationship between physical inputs and physical output of a firm is called production function.
What is the difference between Short-run and long-run in the context of the cost curves of a firm? On the basis of time, market is divided into short-run and long-run. The short-run is a period of time in which output can be increased or decreased by changing only variable factors.
A producer uses various inputs for producing a commodity. The most important factor in deciding the proportion in which various inputs should be used for ensuring a given level of output is the technical requirement. How many units of various inputs are required depends upon the current state of technology.