Introduction to Production

What you’ll learn to do: explain production and the production function

Image of an active steel mill on the left and wide open wheat fields on the right.

Figure 1. Steel production and wheat production have different and distinct production needs.

Businesses engage in production. What does that mean exactly? What is involved? How is steel production different from growing wheat? In this section, we will begin to learn about the behavior of firms, how they make production decisions, and how production costs depend on a firm’s production function.