# stages of production

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stages of production
-Production within an economy can be divided into three main stages: primary, secondary and tertiary.
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theory of production
deal with the relationship between the factors of production and the output of goods and services
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production function
function provides an abstract mathematical representation of the relation between the production of a good and the inputs used. A production function is usually expressed in this general form: Q = f(L, K)
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increasing returns
to scale results if long run production changes are greater than the proportional changes in all inputs used by a firm
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diminishing returns
- A yield rate that after a certain point fails to increase proportionately to additional outlays of capital or investments of time and labor
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law of diminishing returns
When increasing amounts of one factor of production are employed in production along with a fixed amount of some other production factor, after some point, the resulting increases in output of product become smaller and smaller.
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law of variable proportions
The law of variable proportions states that as the quantity of one factor is increased, keeping the other factors fixed, the marginal product of that factor will eventually decline.
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marginal product
The change in the quantity of total product resulting from a unit change in a variable input, keeping all other inputs unchanged. Example: marginal product = change in total product/ change in variable input
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negative returns