Production functions A Production function in general, without specifying what type, is related to the output of a production process that begins with the production factors. Production functions are integral to explaining marginal products and allocative efficiency. There are different classifications for production functions and what constitutes them, determined by the type of production. This WIKI article aims to focus on the substitutive production function, explaining what it is and means, as well as the limiting one, doing the same. (1) Factors of Production Factors of production are the inputs into any production process. Finished goods are what results from the process, often also called raw and finished goods. The more factors of production supplied as inputs, the greater the number of goods completed, and of course the opposite is equally true. The typical factors of production are land, labor and capital goods. more recently entrepreneurship has also been added among these factors. Understanding these is essential to understanding the two production functions that this WIKI article focuses on. (2)TerrainUnderstanding what is meant by territory is relatively simple. This includes all the natural resources that a given producer has at his disposal. Most often this means immediate natural resources, such as oil or the property on which the production facility is located. This may also include water or ocean near the property. The factor of production called land most often includes the natural, raw raw materials that are used in production and are available to the production plant.(2)LaborThe factor of production "labor" is also ... half the paper .. ....increase if the factors used are also used at an increasing rate. No matter how efficient your factors of production are, you need to use more of them to achieve significantly higher output. There is also a limitation to this rule, which is that the two factors of production are used at a very similar level of involvement. If one factor of production is greatly in excess of the other, then the excess will be used until it reaches a level similar to the factor of production of which there is less. Once even amounts are reached, the initial rule applies again and an increase in both is required for a significant increase in production. To be truly efficient with this model only if both factors are used at similar levels and there is no excess of one, meaning none is wasted and optimal output can be achieved.