According to Bates and Parkinson: “Production is the organized activity of transforming resources into finished products in the form of goods and services; the objective of production is to satisfy the demand for such transformed resources”.
According to J. R. Hicks: “Production is any activity directed to the satisfaction of other peoples’ wants through 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 wants.
Production is an activity of utter importance for any economy. In fact, a nation with a high level of productive activities spearheads the prosperity charts. This is because raw goods, surely are valuable, but production done upon these raw goods adds up to their value or their want-satisfying power. We are aware of the fact that utility is the want-satisfying power of any commodity or service. Evidently, the countries that have a high level of production accompanied by the production of a wide variety of goods, are termed as the golden economies.
In light of the above-mentioned facts, we can conclude that production is the process of working upon the resources of nature and pushing or creating their utilities in order to satisfy the wants of consumers. However, the term production in Economics is more than what meets the eyes. Production is not only concerned with the tangible aspect. Rather production also includes any service that can satisfy the wants of people. Hence now you know why the service of transportation is a process of production too. Notice how this service is intangible. It is important to note that production cannot account for the creation of the seed, but it accounts for the transformation of the seed into a tree, the sale of the fruits grown on that tree and so on. In other words, production is not the creation of matter, which is also out of the realms of human powers.
Production creates output.
- ↑ Definitions of Production Economics Discussion
- ↑ Explaining the meaning of Production Toppr