Answer:
Production in Economics is sometimes defined as the creation of utility or the creation of wants – satisfying goods’ and services. It is said that just as a man cannot destroy matter, he also cannot create matter.
“If consuming means extracting utilities from,” says Fraser, “producing means putting utility into.”
Production, therefore, should be defined, not as a creation of utility, but the creation (or addition) of value. Utilities are created in three forms:
- Form utility
- Time utility
- Place utility.
Production in Economics is a very important economic activity. As we are aware, the survival of any firm in a competitive market depends upon its ability to produce goods and services at a competitive cost.
One of the principal concerns of business managers is the achievement of optimum efficiency in production by minimising the cost of production.
