Cost And Production Functions

"Cost and production functions are indispensable tools for economics in general. In the process of decision-making, a manager should understand clearly the relationship between the inputs and output on one hand and output and costs on the other. There are several managerial uses of the production function. It can be used to compute the least-cost combination of inputs for a given output or to choose the input combination that yields the maximum level of output with a given level of cost. The production function is useful in deciding on the additional value of employing a variable input in the production process. Cost function expresses the relationship between cost and its determinants such as the size of plant, level of output, input prices, technology, managerial efficiency, etc. This book overviews on different approaches to examination of production and cost functions, analysis of some empirical estimates of these functions, and managerial uses of the estimated functions."