Market behavior and the types of production functions

The paper presents a unified approach to theory and estimation of production functions based on a simple observation that any production function has a unique representation of its isoquants in terms of the differential equation which may be observable in market. Expressing the marginal rate of substitution between two inputs as the differential equation in these two inputs, various classes of production functions are obtained by integrating this differential equation. Not only does this general approach yield a systematic framework for all known forms but it also generates new types of production functions. Empirical application is also indicated.