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Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
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The production function of a firm will change whenever : 1. input price changes 2. the firm increases the level of output 3. the relevant technology changes 4.
The production function of a firm will change whenever : 1. Input price changes 2. The firm increases the level of output 3. The relevant technology changes 4. The firm employs more of any input
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Nidhi taparia![best-answer]()
I am assuming by saying "production function will change" you mean a change in the way the functional / technical relationship between output and inputs is determined. So the answer is change in technology causes a change in production function. Think about it this way - when technology improves, lesser labour in comparison to capital may be required to produce the same output. When input price reduces, firm can here also produce same output for lesser labour in the same cost. But this will not change the proportion of labour to capital i.e. the production function. Lesser labour because labour is cheaper now. Costs do not play a role in production function. Increase in output does not mean change in production function. If any more of one input is utilised, that also does not alter production function.