The Production Structure

Abstract

In this chapter we introduce three models of the production technology, each relating input vectors to output vectors. The input correspondence maps output vectors into subsets of input vectors. This correspondence is the inverse of the output correspondence, which maps input vectors into subsets of output vectors. The two correspondences are equivalent to the graph of the technology (Proposition 2.1.8). Although the three models portray the same technology, they emphasize different aspects of it. The input correspondence highlights input substitution and the output correspondence highlights output substitution, while the graph models input output transformation, like scale properties.