The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Production and Cost Functions

  • Melvyn A. Fuss
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1668

Abstract

The traditional starting point of production theory is a set of physical technological possibilities, often represented by a production or transformation function. The development of the theory parallels the firm’s objective (cost minimization or profit maximization) and leads to input demands (and output supplies in the case of profit maximization) constructed from an explicit consideration of the underlying technology (i.e. derived directly from the production function).

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Melvyn A. Fuss
    • 1
  1. 1.