Estimation of Short Run Production Function (A Case Study of Shakarganj Mills Limited)

10 Pages Posted: 31 May 2011

See all articles by Dr. Furrukh Bashir

Dr. Furrukh Bashir

University of the Punjab (PU) - Department of Economics; The Islamia University of Bahawalpur, Pakistan

Tahir Saeed

IMS, B. Z. University, Multan

Sadaf Naz

IMS, B. Z. University, Multan

Zubair Khan

IMS, B. Z. University, Multan

Farhan Iqbal

IMS, B. Z. University, Multan

Waleed Ali

IMS, B. Z. University, Multan.

Mudassar Raheem

IMS, B. Z. University, Multan.

Date Written: May 30, 2011

Abstract

The production function is a mathematical expression which relates the quantity of factor inputs to the quantity of outputs that result. The short run is a period of time in which at least one input is fixed. For that purpose we have used the time series data of Shakarganj Mills limited having 28 observations (Dec. 2003-Sep. 2010).

We have used the multiple regression analysis for estimation of results. We have estimated Total revenue product of labor and Total resource cost of labor we find out optimal labor units 1003 at that point marginal revenue product of labor is equal to marginal resource cost of labor and at that point the firm’s profit is maximum. The firm should hire 1003 units of labor and here the profit of the firm will be the maximum and if firm hire more labor than 1003 units of labor then marginal productivity of labor decreases and the firm will bear loss.

Keywords: Optimal level of one variable input, Shakarganj Sugar Mills Pvt Ltd Jhang, Marginal Resource Cost of Labor, Marginal Revenue Product of Labor

Suggested Citation

Bashir, Furrukh and Saeed, Tahir and Naz, Sadaf and Khan, Zubair and Iqbal, Farhan and Ali, Waleed and Raheem, Mudassar, Estimation of Short Run Production Function (A Case Study of Shakarganj Mills Limited) (May 30, 2011). Available at SSRN: https://ssrn.com/abstract=1855703 or http://dx.doi.org/10.2139/ssrn.1855703

Furrukh Bashir (Contact Author)

University of the Punjab (PU) - Department of Economics ( email )

Lahore
Pakistan

The Islamia University of Bahawalpur, Pakistan ( email )

Bahawalpur, Punjab 63100
Pakistan

Tahir Saeed

IMS, B. Z. University, Multan ( email )

1-A, E-5, Phase VII
Hayatabad
Multan, Khyber Pakhtunkhwa 25000
Pakistan

Sadaf Naz

IMS, B. Z. University, Multan ( email )

1-A, E-5, Phase VII
Hayatabad
Multan, Khyber Pakhtunkhwa 25000
Pakistan

Zubair Khan

IMS, B. Z. University, Multan ( email )

1-A, E-5, Phase VII
Hayatabad
Multan, Khyber Pakhtunkhwa 25000
Pakistan

Farhan Iqbal

IMS, B. Z. University, Multan ( email )

1-A, E-5, Phase VII
Hayatabad
Multan, Khyber Pakhtunkhwa 25000
Pakistan

Waleed Ali

IMS, B. Z. University, Multan. ( email )

1-A, E-5, Phase VII
Hayatabad
Multan, Khyber Pakhtunkhwa 25000
Pakistan

Mudassar Raheem

IMS, B. Z. University, Multan. ( email )

1-A, E-5, Phase VII
Hayatabad
Multan, Khyber Pakhtunkhwa 25000
Pakistan

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