Editing Production function (section)

===The practice of production functions===
{{main article|Production (economics)}}

The theory of the production function depicts the relation between physical outputs of a production process and physical inputs, i.e. factors of production. The practical application of production functions is obtained by valuing the physical outputs and inputs by their prices. The economic value of physical outputs minus the economic value of physical inputs is the income generated by the production process. By keeping the prices fixed between two periods under review we get the income change generated by a change of the production function. This is the principle how the production function is made a practical concept, i.e. measureable and understandable in practical situations.