theory of cost and production functions pdf

Theory of cost and production functions pdf

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A Brief History of Production Functions

Cost theory and estimation

Production function

Hollis B. The problem,

The theory involves some of the most fundamental principles of economics. These include the relationship between the prices of commodities and the prices or wages or rents of the productive factors used to produce them and also the relationships between the prices of commodities and productive factors, on the one hand, and the quantities of these commodities and productive factors that are produced or used, on the other. The various decisions a business enterprise makes about its productive activities can be classified into three layers of increasing complexity. The first layer includes decisions about methods of producing a given quantity of the output in a plant of given size and equipment. It involves the problem of what is called short-run cost minimization.

A Brief History of Production Functions

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A sequel to his frequently cited Cost and Production Functions , this book offers a unified, comprehensive treatment of these functions which underlie the economic theory of production. The approach is axiomatic for a definition of technology, by mappings of input vectors into subsets of output vectors that represent the unconstrained technical possibilities of production. To provide a completely general means of characterizing a technology, an alternative to the production function, called the Distance Function, is introduced. The duality between cost function and production function is developed by introducing a cost correspondence, showing that these two functions are given in terms of each other by dual minimum problems. The special class of production structures called Homothetic is given more general definition and extended to technologies with multiple outputs.

A sequel to his frequently cited Cost and Production Functions , this book offers a unified, comprehensive treatment of these functions which underlie the economic theory of production. The approach is axiomatic for a definition of technology, by mappings of input vectors into subsets of output vectors that represent the unconstrained technical possibilities of production. To provide a completely general means of characterizing a technology, an alternative to the production function, called the Distance Function, is introduced. The duality between cost function and production function is developed by introducing a cost correspondence, showing that these two functions are given in terms of each other by dual minimum problems. The special class of production structures called Homothetic is given more general definition and extended to technologies with multiple outputs. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press.

Cost theory and estimation

In economics , a production function gives the technological relation between quantities of physical inputs and quantities of output of goods. The production function is one of the key concepts of mainstream neoclassical theories, used to define marginal product and to distinguish allocative efficiency , a key focus of economics. One important purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors, while abstracting away from the technological problems of achieving technical efficiency, as an engineer or professional manager might understand it. For modelling the case of many outputs and many inputs, researchers often use the so-called Shephard's distance functions or, alternatively, directional distance functions, which are generalizations of the simple production function in economics. In macroeconomics , aggregate production functions are estimated to create a framework in which to distinguish how much of economic growth to attribute to changes in factor allocation e.


This study is the result of an interest in the economic theory of production intermittently DRM-free; Included format: PDF; ebooks can be used on all reading devices Professor G. C. Evans has given in terms of a simple total cost function.


Production function

Ronald William Shephard. Many of our ebooks are available for purchase from these online vendors:. Many of our ebooks are available through library electronic resources including these platforms:.

This paper gives an outline of evolution of the concept and econometrics of production function, which was one of the central apparatus of neo-classical economics. It covers almost all specifications proposed during , and further the LINEX production functions and incorporation of energy as an input. The paper in divided into 1 single product functions, 2 joint product functions, and 3 aggregate production functions.

1 comments

  • Lucy B. 20.11.2020 at 03:07

    Read Online · Download PDF In economic theory the production function is a mathematical statement relating quantitatively the purely technological relationship Here we are concerned with the traditional cost function of economic theory.

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