Chapter 6 Production and Cost: One Variable Input. Production Function. The production function identifies the maximum quantity of good y that can be produced from any input bundle (z 1 , z 2 ). Production function is stated as: y=F(z 1 , z 2 ). Production Functions.
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TP (z1)=F(z1, 105)
Minimize W1Z1 by choice of Z1.
Subject to constraint y=TP(z1).
VC(y)=the minimum variable cost of producing y units of output.