Calculate the Leontief production equation to find external demand, total output, or internal consumption from the other two values.
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Leontief Production Equation Formula
The calculator uses the basic Leontief production balance:
- O = total output
- E = external demand
- I = internal consumption
To solve for each missing value, the equation is rearranged as needed.
If you enter external demand and internal consumption, the calculator finds total output. If you enter total output and internal consumption, it finds external demand. If you enter total output and external demand, it finds internal consumption.
The unit selectors convert values to base units before the calculation. The result is then converted back to the unit selected for the missing field.
Common Unit Conversions
| Unit option | Meaning | Base-unit multiplier |
|---|---|---|
| Units (u) | Single units | 1 |
| Thousands (10³ u) | Thousands of units | 1,000 |
| Millions (10⁶ u) | Millions of units | 1,000,000 |
How to Interpret the Inputs
| Value | What it means | Relationship |
|---|---|---|
| External demand | Output needed by final users outside the producing system | Part of total output |
| Internal consumption | Output used inside the system as intermediate input | Part of total output |
| Total output | The full production amount needed | External demand plus internal consumption |
Example Problems
Example 1: Find total output
You have an external demand of 8,000 units and internal consumption of 2,500 units.
The total output is 10,500 units.
Example 2: Find external demand
You have a total output of 3 million units and internal consumption of 750 thousand units.
The external demand is 2,250,000 units, or 2.25 million units.
FAQ
What is the Leontief production equation?
The Leontief production equation describes how much total output is needed to satisfy both external demand and internal use. In this simplified form, total output equals external demand plus internal consumption.
Why does total output include internal consumption?
Some production is used as input for other production. That part is internal consumption. Total output must cover both the final demand outside the system and the intermediate demand inside the system.
Can external demand or internal consumption be larger than total output?
In this basic equation, each part should normally be less than or equal to total output. If external demand or internal consumption is larger than total output, the missing value may become negative. That usually means the inputs do not describe a valid production balance.
