Fundamentals of a Cost Theory and Minimal Cost Combination
So far, our production theoretical studies have been of a strictly quantity- orientated nature. Our objective was to represent the productive relations between factors of production and products, and we discussed them exclusively in terms of quantitative relations between input and output goods. In this context, we took into consideration the economic principle by introducing and applying an efficiency criterion. This allowed us to separate bad productions from good ones and to eliminate the bad ones. What was left were a technology’s efficient production points, which formed the basis for a description of productive relations by means of production functions.
KeywordsProduction Function Product Quantity Factor Price Input Quantity Output Quantity
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