Suppose the production of long-distance airline flights is described by a fixed proportion production process in which three crew members (i. e., labor) are required for each aircraft (i. e., capital). If the airline operates with four crew members per plane, then we know that: A. the production process violates diminishing margin returns. B. production at this point is technically inefficient. C. the isoquants for this production process are upward sloping. D. the airline will have negative profits.

production at this point is technically inefficient.

Explanation:

The Factors of Production are simply the inputs in the production process such as labor, capital, materials.

The production function shows the various materials or recipes for producing a given level of output. It shows the output that can be produced if the firm is technically efficient.

Production at point of technically inefficient are said to be points in the production set but not on the production function.

Fixed Proportion Production Function is simply a Production function with L-shaped isoquants that is only one combination of labor and capital can be used to produce each level of output. It describes situations in which methods of production are limited.

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