Skip to main content
SpringerLink
Log in
Book cover

The New Palgrave Dictionary of Economics pp 10815–10822Cite as

Palgrave Macmillan

Production and Cost Functions

  • Reference work entry
  • First Online:

  • 55 Accesses

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).

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   6,499.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD   8,499.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Bibliography

  • Baumol, W.J. 1977. Economic theory and operations analyses. 4th ed. Englewood Cliffs: Prentice-Hall.

    Google Scholar 

  • Berndt, E.R., and M.A. Fuss, eds. 1986. The Econometrics of Temporary Equilibrium, a special issue of the Journal of Econometrics, November.

    Google Scholar 

  • Berndt, E.R., and M. Khaled. 1979. Parametric productivity measurement and choice among flexible functional forms. Journal of Political Economy 87: 1220–1245.

    Article  Google Scholar 

  • Berndt, E.R., and D.O. Wood. 1975. Technology, prices and the derived demand for energy. Review of Economics and Statistics 57(3): 259–268.

    Article  Google Scholar 

  • Brown, R.S., D.W. Caves, and L.R. Christensen. 1979. Modelling the structure of cost and production for multiproduct firms. Southern Economic Journal 46: 256–270.

    Article  Google Scholar 

  • Burgess, D.F. 1974. Production theory and the derived demand for imports. Journal of International Economics 4: 103–117.

    Article  Google Scholar 

  • Christensen, L.R., D.W. Jorgenson, and L.J. Lau. 1973. Transcendental logarithmic production frontiers. Review of Economics and Statistics 55(1): 28–45.

    Article  Google Scholar 

  • Christensen, L., D. Jorgenson, and L.J. Lau. 1970. Conjugate duality and the transcendental logarithmic production function. Unpublished paper presented at the Second World Congress of the Econometric Society, Cambridge, England, September.

    Google Scholar 

  • Diewert, W.E. 1969a. Canadian labor markets: a neo-classical econometric approach. Project for the Evaluation and Optimization of Economic Growth, Institute of International Studies Technical Report No. 20, Berkeley, University of California.

    Google Scholar 

  • Diewert, W.E. 1969b. Functional form in the theory of production and consumer demand. Unpublished PhD thesis, Berkeley, University of California.

    Google Scholar 

  • Diewert, W.E. 1971. An application of the Shephard duality theorem, a generalized Leontief production function. Journal of Political Economy 79(3): 481–507.

    Article  Google Scholar 

  • Diewert, W.E. 1974. Applications of duality. In Frontiers of quantitative economics, ed. M.D. Intriligator and D.A. Kendrick, Vol. II, 106–171. Amsterdam: North-Holland.

    Google Scholar 

  • Diewert, W.E. 1982. Duality approaches to microeconomic theory. In Handbook of mathematical economics, ed. K.J. Arrow and M.D. Intriligator, Vol. II, 535–599. Amsterdam: North-Holland.

    Google Scholar 

  • Diewert, W.E., and T.J. Wales. 1987. Flexible functional forms and global curvature conditions. Econometrica 55(1): 43–68.

    Article  Google Scholar 

  • Fuss, M.A. 1970. The time structure of technology: an empirical analysis of the ‘putty-clay’ hypothesis. Unpublished PhD dissertation, Berkeley, University of California.

    Google Scholar 

  • Fuss, M.A. 1977a. The demand for energy in Canadian manufacturing: An example of the estimation of production functions with many inputs. Journal of Econometrics 5(1): 89–116.

    Article  Google Scholar 

  • Fuss, M.A. 1977b. The structure of technology over time: A model for testing the ‘putty-clay’ hypothesis. Econometrica 45(8): 1797–1821.

    Article  Google Scholar 

  • Fuss, M., and D. McFadden, ed. 1978. Production economies: A dual approach to theory and applications. Amsterdam: North-Holland.

    Google Scholar 

  • Fuss, M., D. McFadden, and Y. Mundlak. 1978. A survey of functional forms in the economic analysis of production. In Production economies: A dual approach to theory and applications, ed. M. Fuss and D. McFadden, 219–268. Amsterdam: North-Holland.

    Google Scholar 

  • Hanoch, G. 1970. Generation of new production functions through duality. Harvard Institute of Economic Research Discussion Paper No. 118, Cambridge, MA, April.

    Google Scholar 

  • Hanoch, G. 1978. Generation of new production functions through duality. In Production economics: A dual approach to theory and applications, ed. M. Fuss and D. McFadden. Amsterdam: North-Holland.

    Google Scholar 

  • Hotelling, H. 1932. Edgeworth’s taxation paradox and the nature of demand and supply functions. Journal of Political Economy 40: 577–616.

    Article  Google Scholar 

  • Hotelling, H. 1935. Demand functions with limited budgets. Econometrica 3: 66–78.

    Article  Google Scholar 

  • Jorgenson, D.W. 1986. Econometric methods for modelling producer behaviour. In Handbook of econometrics, ed. Z. Griliches and M.D. Intriligator, Vol. 3, 1841–1915. Amsterdam: North-Holland.

    Google Scholar 

  • Lau, L.J. 1974. Applications of duality theory: comments. In Frontiers of quantitative economics, ed. M.D. Intriligator and D.A. Kendrick, Vol. II, 176–199. Amsterdam: North-Holland.

    Google Scholar 

  • Lau, L.J. 1976. A characterization of the normalized restricted profit function. Journal of Economic Theory 12: 131–163.

    Article  Google Scholar 

  • McFadden, D. 1966. Cost, revenue and profit functions: A cursory review. Working Paper No. 86, IBER, University of California at Berkeley, March.

    Google Scholar 

  • McFadden, D. 1978. Cost, revenue and profit functions. In Production economies: A dual approach to theory and applications, ed. M. Fuss and D. McFadden. Amsterdam: North-Holland.

    Google Scholar 

  • McKenzie, L. 1957. Demand theory without a utility index. Review of Economic Studies 24(3): 185–189.

    Article  Google Scholar 

  • Nadiri, M.I. 1982. Producers theory. In Handbook of mathematical economics, ed. K.J. Arrow and M.D. Intriligator, Vol. II, 431–490. Amsterdam: North-Holland.

    Google Scholar 

  • Nerlove, M. 1963. Returns to scale in electricity supply. In Measurement in economics: Studies in mathematical economics and econometrics in memory of Yehuda Grunfeld, ed. C.F. Christ et al. Stanford: Stanford University Press.

    Google Scholar 

  • Parks, R.W. 1971. Price responsiveness of factor utilization in Swedish manufacturing, 1870–1950. Review of Economics and Statistics 53(2): 129–139.

    Article  Google Scholar 

  • Roy, R. 1942. De l’utilité. Paris: Hermann.

    Google Scholar 

  • Samuelson, P.A. 1947. Foundations of economic analysis. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Shephard, R.W. 1953. Cost and production functions. Princeton: Princeton University Press.

    Google Scholar 

  • Shephard, R.W. 1970. Theory of cost and production functions. Princeton: Princeton University Press.

    Google Scholar 

  • Uzawa, H. 1964. Duality principles in the theory of cost and production. International Economic Review. 5: 216–220.

    Article  Google Scholar 

  • Varian, H. 1984. Microeconomic analysis. 2nd ed. New York: Norton.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Melvyn A. Fuss

Authors
  1. Melvyn A. Fuss
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Copyright information

© 2018 Macmillan Publishers Ltd.

About this entry

Check for updates. Verify currency and authenticity via CrossMark

Cite this entry

Fuss, M.A. (2018). Production and Cost Functions. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1668

Download citation

Publish with us

Policies and ethics

Search

Navigation