## COST FUNCTION ESTIMATION

COST FUNCTION AND ITS DETERMINANTS Cost function expresses the relationship between cost and its determinants such as the size of plant, level of

## PRODUCTION FUNCTION ESTIMATION

In the process of decision-making, a manager should understand clearly the relationship between the inputs and output on one hand and output and

## APPLICATION OF COST ANALYSIS

In the previous posts we discussed total, marginal, and average cost curves for both short run and long run. The relationships between these

## SHORT-RUN COST FUNCTION

In previous post cost concept we distinguished between the short run and the long run. We also distinguished between fixed costs and variable

## COST CONCEPT AND ANALYSIS

The analysis of cost is important in the study of managerial economics because it provides a basis for two important decisions made by

## OPTIMAL COMBINATION OF INPUTS

In the previous post we  learned that any desired level of output can be produced using a number of different combinations of inputs.

## PRODUCTION FUNCTION WITH TWO VARIABLE INPUTS

Now we turn to the case of production where two inputs (say capital and labour) are variable. Although, we restrict our analysis to

## PRODUCTION FUNCTION

Production process involves the transformation of inputs into output. The inputs could be land, labour, capital, entrepreneurship etc. and the output could be

## CROSS-PRICE ELASTICITY

The sales volume of one product may be influenced by the price of either substitute or complementary products. Cross-price elasticity of demand provides

## INCOME ELASTICITY OF DEMAND

The income elasticity of demand measures the responsiveness of sales to changes in income, ceteris paribus. It is defined as the percentage change

## DETERMINANTS OF PRICE ELASTICITY

Price elasticities can be estimated for many goods and services; Table-3 provides some examples. The short-run elasticities reflect periods of time that are