A production function shows a firm how to ______. a) maximize profit b) maximize output c) minimize losses d) minimize output

We are given four options to complete the statement: a) maximize profit b) maximize output c) minimize losses d) minimize output We need to choose the best option that represents what a production function shows a firm.

Now, let's evaluate each option with our understanding of a production function: a) A production function doesn't show the firm how to maximize profit directly, as it mainly focuses on the relationship between inputs and outputs. It doesn't explicitly consider factors like costs and revenue that are necessary to determine profit maximization. b) A production function indeed shows the firm how to maximize output by efficiently using the different inputs in the production process. It helps the firm understand the relationship between input factors, such as labor and capital, and the maximum output that can be derived. c) A production function doesn't directly show the firm how to minimize losses, as it mainly focuses on the input-output relationship. Loss minimization would require the consideration of additional variables such as costs and revenues, which are not captured by a production function alone. d) A production function shows the firm how to maximize output given available inputs, not how to minimize output.

Based on our evaluation in Step 2, we can conclude that the correct option is: b) maximize output Hence, the completed statement should be: "A production function shows a firm how to maximize output."