FACTOR RATIOS AND PRODUCTION FUNCTION OF TEA INDUSTRY IN ASSAM

Factor utilization is a dynamic concept, and most of its measures are based on direct measures based on quantity of labor and capital. It ignores several factors such as seasonal fluctuations in price and demand. In less developed countries, there is a question of optimal factor proportion as the growing unemployment rate coexists with a rising capital-labor ratio. The study highlights the production behavior of Tea Industries using production function analysis. The CES production function is seemed to be consistent and fit the data well. So the elasticity of substitution of the Tea Industries in Assam is not variable or unity; instead, it is constant and less than one. The paper uses a composite model of the performance of Tea Industries based on Principal Component Analysis, and factory utilization will be measured using various ratios.