Production theory consist of alot of concepts that should be explained like production, production fuction, classical production function, law of varaiable propotions, theory of firm behaviours, isocost line and upto so on. ABout what u need information. TThe production is the act of producing goods and services. and the end result of production process is output. While production fuction shows the physical relationship between input and output. and it is purely a physical concept.
Basically we find the traces of theory of production in the writing of von thonen in 1826 who presented this principle that " if factor of production are allocated on the basis of marginal productivity then the total output will be masimized.
In 1894 wickstead in his production theory gave the idea that the factors of production are substitute of one another.
the classical production fuction is concerned with short run period while the neo classical production fuctionis concerned with long run period
SECTION C– SHORT ESSAY – 33 MARKS
1) When MC exeeds, share of AVC in TC increases.Because, AVC=TVC\Q. So, AVC is being pulled up
and AC is being pulled up because AC=TC\Q and if MC exceed TC exceed, too.
2)It's so long time necesarity to explain but know that it is total of short-run curves.
3)My english is not that good for economics.
a)Sure it shall go on producing. It can still earn AFCs, even it is a loss.
b)max. profit is MC=ATC(MR is more than ATC) min. loss is MC=AFC
c)i couldnt understand question (my english)
d)Between q=40 and q=45 earning profit. Between q=25 and q=40 loss. Because MC=S
YOU HAVE TO STUDY WELL BECAUSE I GAVE SHORT ANSWERS WITHOUT EXPLANATINS