What is production and cost function, Managerial Economics

Assignment Help:

Q. What is Production and Cost Function?

Production functions and cost functions are the keystones of managerial and business economics. A production function is a mathematical relationship which captures the essential aspects of the technology by which an organisation metamorphoses resources like land, capital and labour into services or goods like cement or steel. It's the economist's distillation of the salient information contained in engineer's blueprints. Mathematically, let Y denote the quantity of a single output produced by quantities of inputs denoted (x1... xn). Then production function f(x1... xn) determines how a given output can be produced by an infinite combinations of inputs (x1... xn), given the technology in use. Various significant features of the structure of technology are captured by the shape of production function. Relationships among inputs include the degree of complementarily or substitutability among pairs of inputs, and the ability to aggregate groups of inputs into a shorter list of input aggregates. Relationships between inputs and the output include economies of scale and technical efficiency with which inputs are utilised to generate a given output.


Related Discussions:- What is production and cost function

Determine net income by product line, Fandem Technology manufactures two pr...

Fandem Technology manufactures two products using a joint process. The cost of materials going into the joint process for a typical period is $55,000, while labour and overhead to

Please Help, Jane, the manager of a company manufacturing air-conditioning ...

Jane, the manager of a company manufacturing air-conditioning units can choose between two production technologies for a new product line. If she chooses and installs technology 1,

Describe the optimisation of managerial economics, Describe the Optimisatio...

Describe the Optimisation of managerial economics Optimisation techniques are perhaps the most vital to managerial decision making. Given that alternative courses of action are

Find out lowest efficiency wage and value , A risk-neutral agent's working ...

A risk-neutral agent's working life has two periods. In each period, the agent can provide high effort (at personal cost $2,000) or low effort (at zero personal cost). In a given p

Importance of income elasticity, Importance of Income Elasticity If a ...

Importance of Income Elasticity If a country is experiencing economic growth, the income of the people will increase.  However, for those engaged in the production of goods wi

Describe the public utility monopoly, Q. Describe the Public Utility Monopo...

Q. Describe the Public Utility Monopoly? Public Utility Monopoly:   Governmental authorities seize complete management and control of some utilities to protect social interest

Supplementary reserve, Supplementary Reserve, Requirements/Special Deposit ...

Supplementary Reserve, Requirements/Special Deposit If the Central Bank feels that there is too much money in circulation, it can in addition require commercial banks to mainta

Costs of unemploment and inflation, COSTS OF UNEMPLOMENT AND INFLATION   ...

COSTS OF UNEMPLOMENT AND INFLATION   In  an  economy  both  unemployment  and  inflation  have  adverse effects  and policy makers  formulate policy instruments to contain both

Short run production function, Explain the short-run production function wi...

Explain the short-run production function with one variable input with the help of assumed figures. Clearly indicate the three stages of physical product, using table and graphs.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd