Production Theory is a concept in economics that examines how goods and services are created. It focuses on the relationship between inputs, such as labor and capital, and outputs, which are the final products. The theory helps businesses understand how to efficiently allocate resources to maximize production and minimize costs. One key aspect of Production Theory is the production function, which mathematically represents the relationship between inputs and outputs. This function helps firms determine the optimal combination of resources needed to achieve desired levels of production. Understanding this theory is essential for improving productivity and profitability in various industries.