= Leontief Production Function =

The '''Leontief production function''' is a formulation of the production function.

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== Formulation ==

For two factors ''K'' and ''L'', the production function is specified as:

''Q = Min{K,L}''

Consider the following graph, where isoquants are drawn in red, purple, and blue; and where the points of optimal production are connected by the black line.

{{attachment:graph.svg||width=200}}

This function has several useful characteristics:
 * the limiting factor determines production level (''Q'')
   * in most applications of this function, there is an assumption about the limiting factor, reducing a problem to be univariate
 * conversely, the unlimited factor has 0 marginal product
 * constant returns

Production does not necessarily have to be 1:1. Consider a car factory, with factors of tires and engines. A single car requires 4 tires to every 1 engine, so the function would be described as ''Q = Min{4 tires, 1 engine}''.



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CategoryRicottone