KOMPARACIJA ZAKONA O PRINOSIMA I LEONTIEFOVE PROIZVODNE FUNKCIJE
A COMPARISON OF THE THEORY OF YIELD AND LEONTIEF PRODUCTION FUNCTION

Summary/Abstract: Enterprises, as manufacturing entities, can produce only one type of product or multiple product types simultaneously. Production, which is characterized by getting only one type of product, and only one type of output, is called a simple production. It is a true rarity in today's conditions. Modern companies produce more products at the same time as their production becomes more complex production characteristics. The complex production is in case when the company produces a variety of products or more varieties of the same product. The complex production can be characterized by the simultaneous production of multiple products using the same inputs produced or producing more products using a variety of inputs. The first form of complex manufacturing is called a coupled production and other is alternative production. In a coupled production, besides to primary products, coupled or by-products are obtained in production. In oil production, the coupled product is tar and at the production of sugar from sugar beet as coupled product we receive molasses. Which product related to the production will be essential, depends not only on the technological process, but in some cases on economic and historical reasons. That the reasons of this nature may affect the treatment of the coupled products in production, we can see, for example, at the development of livestock in Australia. Initially, the development of animal husbandry has been initiated by large demand from the textile industries of England, which needed wool. So, wool from the Australian livestock was the major product, and meat and milk were by-products. Due to the technological developments of artificial fibers, wool, as input, was less used in the textile production process, which caused that milk and meat as products of Australian livestock are treated as major products, while wool has become a by-product. Alternative production is, in contrast to the complex forms of coupled production, characterized by the production of multiple products performed using the same production resources during different time periods. With the completion of the manufacturing process of one product, the production of another product begins. This way of classification of individual production has a special importance in microeconomic analysis of producer behaviour, because the whole analysis not only of production, but also of costs and equilibrium of companies on different market structures is based on a simple production. This means that multi-production companies (companies producing different products) are ignored. Of course, this hypothesis is not real and very restrictive, but helps to get a right understanding of the concept of production and the phenomenon of producer behaviour.

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