Managerial Economicsintermediate
Compare factor-factor analysis with product-product analysis.
Answer
Factor-factor analysis examines choices among production factors, such as labor and capital combinations. Product-product analysis examines choices or relationships between different outputs. Both support production planning, but one focuses on input combinations and the other on output combinations.
Explanation
### The concept
Production analysis can focus on different decision relationships. Factor-factor analysis asks how one factor may be combined or substituted with another, such as labor and capital. Product-product analysis considers relationships between outputs, such as deciding which products to produce. Factor-product analysis instead relates a factor to a product, while multifactor-multiproduct analysis considers several inputs and outputs together.
### What a good answer covers
- Defines factor-factor analysis as an input-combination question.
- Defines product-product analysis as an output-choice question.
- Gives a relevant example of each.
- Distinguishes both from factor-product analysis.
### Terms
- **Factor**: An input used in production, such as labor or capital.
### Remember
Factor-factor compares inputs; product-product compares outputs.
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