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The health needs of any population will be considerable, and there will never be enough resources to meet them all. As resources are scarce in relation to needs, they must be allocated by some mechanism, driven by the government or the private market.

To understand the results of the various ways that resources can be allocated, economists have developed a concept called the production function.

A production function is a mathematical concept that expresses a relation between resources and the outputs which the resources produce. The venue of the production can be a department, a plant, or a business firm. An economic “actor” or “manager” is responsible for combining the resources so they yield the outputs. An exemplified expression for a production function is Q(L, K, ...

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