production function, perfect competition, sources of production, Lagrangs multi-pliers, maximisation of profit, total effect, substitute and cost effects
In this paper there are gradually derived the results of price alternation of production factors on decision of the firm on volume of manufactured production and the quantity of hired production inputs. Submitted approach supposes the formal form of production function in the form Q = f(F1, F2,..., Fn). Further it appears from the classic theory of the firm that takes effect on the environ-ment of perfect competition and that pursues the maximisation of its profit as its primary purpose. Mentioned presumption means that the price of product P and prices of sources pi are constant. Relations that are deduced in the paper have the key signification for practical analyses of demand of the firm for production factors. By means of estimative elasticities it is possible to deduce the character of demand functions for single production factors and thus make a better decision on the market environment.