# Why is it Y=F(K,L), and not Y=F(K,L, Economic profit)?

Initially, we have the distribution of income: Y = MPLxL + MPLxK.

But, when the economic profit = 0, we have constant returns to scale. And since, input=output, if I am not mistaken, there is just enough money to distribute to L and K.

zY = F(zK,zL)

Therefore, there isn't enough money to distribute to the economic profit.

So, why Why is it Y=F(K,L), and not Y=F(K,L, Economic profit). It would make the economic profit automatically taken into account when there are constant returns to scale.

• "since, input=output, if I am not mistaken" Do you mean value of input and value of output? Sep 7, 2022 at 14:20
– 1muflon1
Sep 9, 2022 at 8:32
• hi, How do I accept it? Sep 9, 2022 at 11:32

If you are measuring $$Y$$ in monetary terms, then $$Y=F(K,L)$$ is the value of output. $$F$$ is about feasibility, not sure why you would include the size of economic profit therein. You can derive the economic profit by subtracting costs of input from value of output.

The production function is a technological relation, describing the technological possibilities of producing $$Y$$ with certain factors of production, $$K$$ and $$L$$, in this case. It links output with production factors.