Production

Definition of Production: 

Production can be defined as the creation of goods and provision of services, for the satisfaction of human wants. It is the various economic activities, aimed at the creation, and distribution of goods and services to the final consumers.

Production is the creation of physical goods such as cars, shelter, books, plastics, computers, etc. It is the provision of services such as medical doctors, lawyers, teachers, etc. Production is not complete until the goods get to the final consumer.

“Production is any activity directed to the satisfaction of other peoples’ wants, through an exchange”.

This definition makes it clear that, in economics, we do not treat the mere making of things as production. What is made must be designed to satisfy human wants.

We have different types of goods, Consumer goods, and Producer or Capital goods.

Productivity per work is best measured by total output (production) divided by the number of workers.