Here we keep some inputs fixed. I'm looking for a "production function" formula that combines knowledge, technology, finance and labor. Linear Homogeneous Production Function, 2. The output, thus, is a function of inputs. Constant Elasticity of Substitution Production Function and 4. This relationship or the production function governs the level of production. Production Function In economics, a production function relates physical output of a production process to physical inputs or factors of production. Our new production has increased by more than m, so we have increasing returns to scale. The production function simply states the quantity of output (q) that a firm can produce as a function of the quantity of inputs to production. A class of production functions that models situations in which inputs can be substituted for each other to produce the same output, but cannot be substituted at a constant rate, contains functions of the form F (z 1, z 2) = Az 1 u z 2 v for some constants A, u, and v. Such a production function is known as a Cobb-Douglas production function. If β+α = 1, the output will increase in c. In this case, the Cobb-Douglas production function has constant return to scale. The production function is a statement of the relationship between a firm’s scarce resources (i.e. Meaning of Production Function. This means that if we increase every production factor by c, the output level will increase in c β+α. Production function formula? ADVERTISEMENTS: Four most important produc­tion functions are: 1. and organization) or inputs. "factors of production," but they are generally designated as either capital or labor. It is a mathematical function that relates the maximum amount of output that can be obtained from a given number of inputs - generally capital and labor. Cobb-Douglas Production Function 3. Q’ = (K*m) 0.3 (L*m) 0.2 = K 0.3 L 0.2 m 0.5 = Q* m 0.5. If a firm has a production function Q=F(K,L) (that is, the quantity of output (Q) is some function of capital (K) and labor (L)), then if 2Q