The estimation of a micro-production function for Intex Hosiery LTD (1982 - 1988)

Abstract

There is little doubt that production functions form an integral part of an enormous range of economic theory. In microeconomics, production functions underlie the supply side of markets, generate production possibility frontiers, offer an explanation on income distribution and yield factor demand functions. Production functions are also central to the type of economic growth and of investigations into the rate of progress. This study seeks to use quantitative issues to empirically analyse the relationship between puts output of a single firm, namely Intex Hosiery LTD. In view of this aim. this paper enquires into the theoretical formulation of two well-known production function forms; the Cobb-Douglas production function and the Constant Elasticity of substitution: reviewing practical work undertaken on such studies and finally utilizing them to obtain our empirical results. Though this work does not claim to have broken new ground in the study of econometrics, the choice of estimating a micro production function as opposed to the normal macro production function does produce an interesting contrast.