Cost Theory

  • Michael R. Hammock
  • J. Wilson Mixon


Building on the production theory developed and illustrated in  Chap. 6, this chapter analyzes and illustrates the relationship between the quantity produced and production cost. The illustration is based on the production function and the assumption that each of the two inputs can be purchased in competitive resource markets. Also, the firm is assumed to employ resources in a cost-minimizing combination.


Cost Theory Minimum Cost Combination Production Costs Production Function Illustration 
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Copyright information

© Springer Science+Business Media, LLC 2013

Authors and Affiliations

  • Michael R. Hammock
    • 1
  • J. Wilson Mixon
    • 2
  1. 1.Department of Economics and FinanceMiddle Tennessee State UniversityMurfreesboroUSA
  2. 2.Berry CollegeMount BerryUSA

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