Theory of Production

THEORY OF PRODUCTION

by Anton Antonio

March 15, 2015

The Theory of Production provides the basis for the analysis of costs of production and for the derivation of the supply curve for certain goods or products.  Upland resources are goods and products that could be presented to the market in general and a specific market in particular.  Understanding the causes and effects of the Theory of Production to upland resources, like products from an assembly plant, is equally important.

It must be noted that natural resources found in the uplands also have cost consideration for these to be offered in the market.  The Theory of Production, in economics, is an effort to explain the principles by which a business enterprise decides how much of each commodity that it sells will have to be produced, and how much cost (labor, raw material, fixed capital goods, etc.) it needs to utilize.  The theory involves some of the most basic principles of economics.  These include the relationship between the prices of upland products and the relative cost to produce such upland products and the quantities of these upland products to be produced and the relative production cost necessary to make them available for sale.

Knowledge of the Theory of Production will enable upland managers to understand resource pricing and employment, and allocating resources among alternative uses.  This is the importance of the Theory of Production.

Just my little thoughts…

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