Factor-Factor Relationship (Input-Input)
- The change in the used of one input with other inputs to produce a given level product is studied under factor-factor relationship.
- For example, it is a common problem with the farmers to decide on how much of N, P, and K to use with a view to getting a certain level of a crop output or how much of concentrates and green fodders to feed to a milch animal to get certain amount of milk.
- The question here is of finding out optimum or least cost combination of two or more resources in producing a given amount of output.
- The objective of this analysis is two:
i) Minimization of cost at a given level of output
ii) Optimization of output to the fixed factors through alternative resource use combinations.
Functional relationship
Y = f (X1, X2/X3……………..Xn)
- Here, Y is a function of X1 and X2 while other inputs are kept constant.