Economics formula: what is Q=LK?
Answer:
production (Q) is a function of labor (L) and capital (K).
This is the simplest economic connection meaning production is a dependent of capital and labor
The formula is more specific than the previous answers. The formula is a production function. It tells you how much output (Q) you get from a certain number of labor units (L) and capital units (K). In this case, you multiply the two inputs to get output. Example: if you have 3 units of labor and 5 units of capital you get 15 units of output. An interesting characteristic of this production function is that having zero of either input implies that you can produce no output.
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