Meaning of Production

Production has diverse meanings, but the usage depends on the context in which it is used.

Production in economics can be defined as the various economic activities aimed at the creation of goods and services, and the distribution of these goods to the final consumers for the satisfaction of human wants. That is, production is the making available of goods and services to those who are willing and able to pay for them for the satisfaction of their wants.

Production can equally be defined as the creation of utility while utility is the ability of a commodity or service to satisfy human wants.

All goods and services produced must possess utility, which means that they must be capable of satisfying certain human wants. In effect, economics is not concerned with whether something is good or bad. Its interest is in whether that thing is desired by someone who is prepared to pay for it.

Production in economics is never complete until the goods and services produced get to the final consumers.