ABSTRACT
Factors of production, or 'inputs', are the things which are used in the process of producing goods or services. Given the prices of the various factors of production, producers use their knowledge of the production technology to decide, for each level of output, what mix of inputs optimizes their objective function. Given the prices of the various factors of production, producers use their knowledge of the production technology to decide, for each level of output, what mix of inputs optimizes their objective function. Indeed, an issue which has remained underdeveloped in the economics research programmes concerns the application of methods commonly used in the literature on product differentiation to the case of heterogeneous factors of production. The acknowledgement of the limited explanatory power of demographic and economic factors as determinants of family patterns has forced cultural factors on to the research agenda.
