What is the production function? The production function is the relationship between:

• A. the price of goods and the quantity demanded
• B. total revenue and total cost
• C. consumer preferences and market equilibrium
• D. inputs used in production and the resulting output

Answer: (D)

Verified step by step guidance

1. Understand that a production function in microeconomics describes the relationship between the quantities of inputs used in production and the quantity of output produced.
2. Recognize that inputs typically include factors like labor, capital, and raw materials, while output is the final good or service produced.
3. Note that the production function can be expressed mathematically as \(Q = f(L, K, ...)\), where \(Q\) is output, \(L\) is labor input, \(K\) is capital input, and the function \(f\) shows how inputs are transformed into output.
4. Distinguish the production function from other economic relationships such as demand (price and quantity demanded), cost and revenue, or consumer preferences, which are different concepts.
5. Conclude that the production function specifically captures how varying input quantities affect the level of output, which is fundamental for understanding production decisions.