Production

In microeconomics, production is quite simply the conversion of inputs into outputs. It is an economic process that uses resources to create a good or service that is suitable for exchange. This can include manufacturing, storing, shipping, and packaging. Some economists define production broadly as all economic activity other than consumption. They see every commercial activity other than the final purchase as some form of production.
Production is a process, and as such it occurs through time and space. Because it is a flow concept, production is measured as a “rate of output per period of time”. There are three aspects to production processes:
A production process can be defined as any activity that increases the similarity between the pattern of demand for goods and services, and the quantity, form, and distribution of these goods and services available to the market place.
In the “long run”, all of these factors of production can be adjusted by management. The “short run”, however, is defined as a period in which at least one of the factors of production is fixed.A fixed factor of production is one whose quantity cannot readily be changed. Examples include major pieces of equipment, suitable factory space, and key managerial personnel.