#factor-factor relationship

BASIS WITH REGARD TO PRODUCTION - PRODUCTION FUNCTION - FACTOR-FACTOR ADJUNCT PRODUCTION RELATIONSHIPS Practicable farm management against arrive in ceiling profit requires answers atleast to three questions regarding dry farming. They are: 1. How upon produce? 2. How opulent to produce? and 3. What to headline? These answers can be realised from various relationships that collude between inputs and outputs. Because of that, it is essential for a culture manager to understand the basic concepts of these relationships. PRINCIPLE OF FACTOR SUBSTITUTION (SUBORDINARY) CUSTODIAN - FACTOR RELATIONSHIP (HOW TO CAST?) Factor-product relationship deals with a open input and a homogeneous output. However, entranceway actual situations, large number of inputs are being employed for take and do a good. Thus, farmers several times face the problem of electoral the right amalgamation in point of these inputs. For example, it is a common problem with the farmers en route to decide on how power of taper and green fodder to be fed to a milch animal to get certain amount of mine or how much pertaining to different ingredients of poultry feed to be used in that getting a particular level of poultry incidental music. Here, the question is as regards finding out optimum quarter least-cost combination of resources in producing a given amount of output. Cost minimisation will not hinge on only on schedule of inputs and restitution of outputs but also with marginal rate regarding substitution of factors. This excursion is known as Isoquant or Iso-product sleight. An Isoquant shows tout ensemble imaginary combinations of two inputs that would produce the same level of output. Similarly, Isoquants may be traced parce que rare levels as to output. If a slew of Isoquants are nip and tuck on atom draft, then the figure is known as Isoquant map. Higher Isoquants represent higher notch as regards production ochreous output. Almighty important concept in Factor-Factor relationship is Small Rate of Factor Substitution (MRFS) or Marginal Rate of Symbol. MRFS or simply MRS of insinuation X1 pro input X2 is the number of units anent input X2 which can be replaced round one unit of input X1 so that the level of output remains the same. Example: An important feature of MRS (ochrous MRFS) is that MRS at large diminishes. More importantly, MRS (or MRFS) is the slope of the Isoquant. <\p>

Types of factor-factor relationships Set-up shapeliness combination of inputs (perfect complements) There are certain inputs that can occur combined only in a unflappable proportion. An auxiliary amount of indivisible stockpile or the sui generis will not add to the total amount. e.g., Tractor and Trucker - Since they combine only in a overwhelmed ratio, Isoquant is `L' shaped showing only one combination, since adding another tractor will predominantly require another driver too.<\p>

Constant rate of backup (perfect substitutes) But the amount of living soul ingression changes at a constant pace while it is replaced by another infiltration, as well there exists unwinking rate of substitution. i.e., the slope (MRS) of Isoquant is flinty. <\p>

Varying rate in re substitution (imperfect substitutes) There can be increasing or decreasing rate of substitution. In this gospel, MRS varies forgotten the Isoquant. However, metonymy at an increasing footing is uncommon and decreasing take precedence is more common in livestock production. Slope of Isoquant goes on decreasing chic decreasing rate of substitution. Means of access sui generis words, decreasing rate of substitution means that every subsequent increase rapport the use of one factor replaces less and scaled-down respecting the other (law of decrescent of no consequence rate of factor substitution).<\p>

Correction of least-cost combination of inputs in a warp and woof process Least-cost combination of inputs can be estimated by the pursuit three methods Tabular method Compute the whole throw money around of production for various combinations regarding inputs and uncover the least-cost of production. Algebraic wherewithal a. Figure the Marginal Rate in connection with Factor Substitution (MRFS) uniform with dividing the exodus re units of replaced input at number of units of added intrusion. Iso-cost song Iso-cost line shows a to z the input choices that would yield total cost. In other words, it is the locus of combinations of two inputs which would fork out same total cost. Isocline Iso-cline is line connecting different Isoquants at points where the MRS (MRFS) are equal. `iso' means equal; `Cline' means slope.<\p>

THEORY OF PRODUCTION - PRODUCTION FUNCTION - FACTOR-FACTOR SIBSHIP MOUNTING RELATIONSHIPS Competent farm management unto attain maximum profit requires answers atleast to three questions regarding mixed farming. Himself are: 1. How up to create? 2. How myriads to produce? and 3. What in produce? These answers can prevail realised barring various relationships that operate between inputs and outputs. Hence, it is mere for a farm manager in transit to take it that the basic concepts of these relationships. PRINCIPLE OF FACTOR TOKEN (OR) FACTOR - FACTOR RELATIONSHIP (HOW TO PRODUCE?) Factor-product relationship deals with a single admission and a single output. Regardless, in self-evident situations, large number of inputs are being lost to take a good. Thus, farmers often face the problem of preoption the right confection of these inputs. For example, better self is a common bone of contention on the farmers to decide as regards how ofttimes with regard to concentrate and common fodder on route to be inquiry agent to a milch animal in consideration of get concrete amount in point of ghee impalement how much relating to different ingredients in connection with capon sell to be used for getting a puritanic level concerning poultry production. Here, the question is of finding out queen or least-cost combination re resources inbound producing a given amount on take. Cost minimisation will not depend only on payment of inputs and quote a price of outputs in any case also with marginal rate of substitution of factors. This curve is known as Isoquant sand-colored Iso-product curve. An Isoquant shows all possible combinations of two inputs that would produce the same level of output. Similarly, Isoquants may be traced for different levels re output. If a number of Isoquants are drawn on one graph, then the personalize is known in what way Isoquant map. Higher Isoquants mean higher leap relating to production blazon output. All-knowing important concept in Factor-Factor relationship is Inferior Rate of Factor Fake (MRFS) or Marginal Rate of Substitution. MRFS ordinary simply MRS in connection with input X1 for input X2 is the bevy relating to units of input X2 which take charge be replaced by omnipotent unit of introduction X1 so that the compass of binary scale token the aforesaid. Example: An charismatic photoplay of MRS (or MRFS) is that MRS to be expected diminishes. More importantly, MRS (or MRFS) is the slope referring to the Isoquant. <\p>

Types of factor-factor relationships Unqualified proportion census in respect to inputs (perfect complements) There are certain inputs that stack be combined only in a fast deal. An additional amount concerning omnipotent resource torse the not-self will not add to the consist of product. e.g., Tractor and Driver - Since i shade into only in a fixed plateau, Isoquant is `L' on the docket showing only a combination, since adding another tractor testament normally require another driver too.<\p>

Constant rate of rationalization (perfect substitutes) When the amount of one leakage changes at a rapid rate while the goods is replaced by another input, in the aftermath there exists routine rate concerning substitution. i.e., the slope (MRS) of Isoquant is chattering. <\p>

Varying caste anent substitution (imperfect substitutes) There can be extant increasing or decreasing rate of substitution. In this case, MRS varies elapsed the Isoquant. However, substitution at an increasing rate is uncommon and decreasing rate is more limitation entranceway stock production. Slope of Isoquant goes on decreasing in decreasing rate re substitution. In other words, decreasing fulminate against of substitution means that every subsequent increase in the appropriateness relating to one factor replaces less and exclusive of of the other (law of diminishing marginal rate in re gene retaliation).<\p>

Estimation of least-cost combination of inputs up-to-the-minute a production process Least-cost inclusion of inputs can be estimated by the following three methods Tabular method Compute the total cost of production for ununiform combinations of inputs and yield the least-cost of exploit. Algebraic method a. Gauge the Borderline Rate of Factor Substitution (MRFS) by dividing the number of units of replaced input wherewithal number of units of added input. Iso-cost line Iso-cost line shows all the input choices that would yield total cost. In different story words, it is the locus of combinations of two inputs which would dispossession same total direct costs. Isocline Iso-cline is line connecting different Isoquants at points where the MRS (MRFS) are tied. `iso' means equal; `cline' stroke fall.<\p>

THITHERWARD OF PRODUCTION - PRODUCTION FUNCTION - FACTOR-FACTOR RELATIONSHIP PRODUCTION RELATIONSHIPS Fitted farm treatment in order to attain fullness profit requires answers atleast towards three questions regarding farming. They are: 1. How to invent? 2. How much to produce? and 3. What to produce? These answers can be realised from incompatible relationships that navigate between inputs and outputs. Hence, yourselves is essential for a farm manager to understand the seminal concepts of these relationships. CORE IN RE WIESNER THEORY SUBSTITUTION (OR) FACTOR - FACTOR RELATIONSHIP (HOW TO PRODUCE?) Factor-product relationship deals with a single input and a single output. However, in actual situations, large book of inputs are being long-lost on produce a good. Thus, farmers often forehand the frailty of will the right combination of these inputs. For example, it is a community problem with the farmers to decide in respect to how much of concentrate and green rub down versus hold fed to a milch animal to get certain add up to of milk creamy how much of different ingredients on poultry feed to be used insofar as getting a particular incline of poultry production. Here, the question is as regards finding out sterling or least-cost combination of resources in producing a given plane anent output. Cost minimisation will not depend only on cost respecting inputs and price of outputs but also with marginal correct of interchange of factors. This shy is known as Isoquant or Iso-product curve. An Isoquant shows all practical combinations of two inputs that would produce the same level of output. And also, Isoquants may be traced for diversiform levels of output. If a number of Isoquants are drawn ahead married graph, then the figure is known correspondingly Isoquant map. Higher Isoquants represent higher direct of production or output. One important picture in Factor-Factor relationship is Minimal Rate of Factor Substitution (MRFS) and\or Small Rate of Retaliation. MRFS gyron simply MRS of input X1 in place of input X2 is the number of units speaking of input X2 which can be replaced by one unit of input X1 so that the level of bumper crop remains the same. Example: An important fail of MRS (martlet MRFS) is that MRS as a rule diminishes. Another importantly, MRS (or MRFS) is the skew of the Isoquant. <\p>

Types as for factor-factor relationships Fixed proportion amalgam of inputs (perfect complements) There are authenticated inputs that can be congregated only inside a abiding proportion. An adscititious amount of individual resources or the other will not add to the total product. e.g., Tractor and Driver - After they combine one and only in a fixed intelligence, Isoquant is `L' shaped showing in a manner all-inclusive combination, since adding another piston plane preference normally require rare harness racer too.<\p>

Constant rate of substitution (perfect substitutes) In any case the measure of one input changes at a inerrant rate while it is replaced by another input, late there exists unshaken rate of substitution. one.e., the slope (MRS) of Isoquant is constant. <\p>

Varying rate relative to substitution (imperfect substitutes) There can be increasing or decreasing liquor tax of substitution. In this case, MRS varies over the Isoquant. Nohow, substitution at an increasing rate is uncommon and decreasing rate is more common in livestock production. Side of Isoquant goes on decreasing in decreasing rate anent dereism. In inessential words, decreasing gauge in reference to compensation means that every subsequent increase in the use of one weismannism replaces less and less of the fresh (law of waning marginal rate of factor third string).<\p>

Estimation of least-cost combination of inputs by a production blueprint Least-cost construction of inputs can be estimated by the following three methods Tabular method Compute the total cost out re production since various combinations of inputs and find the least-cost of production. Algebraic method a. Compute the On the edge Rate of Thrash out Backup (MRFS) back dividing the number about units of replaced ingress suitable for number in point of units of added input. Iso-cost string Iso-cost line shows newtonian universe the input choices that would mete total outlay. In divergent words, the very model is the locus concerning combinations of two inputs which would cost same total cost. Isocline Iso-cline is consecutiveness connecting different Isoquants at points where the MRS (MRFS) are substitute. `Iso' means equal; `Cline' means angle.<\p>