The document defines and explains the cost function, which refers to the relationship between cost and output level when technology is held constant. It can be expressed as C=f(Q), where C is the cost of production and Q is the quantity of output. There are two types of cost functions: short run and long run. The short run cost function includes variable and fixed costs, while the long run cost function includes variable costs and allows fixed costs to vary as well. Production functions for the short run and long run are also discussed.

1. CostFunction
NAME : MANJU JANGRA
ECONOMIC PRESENTATION.

2. Cost function….
Cost function refers to the functional relationship
between cost and output. It studies the behavior of cost
at different levels of output when technology is
assumed to be constant.
It can be expressed as below:
C= f(Q)
(Here, C= Cost of production; and Q= Quantum of
output).

3. Types of Cost
Functions There are two type of cost function :
a) Short run
b) Long run

4. Shortruncost
1)Variablecost
2)Fixedcost(e.g.plantandmachinery)
Longruncost
1)Variablecost
2)Fixedcost

5. Short run production function Long run production function
K1 K2
L1 L2 x
y
Labour
C
a
p
i
t
a
l
0
……………………….
…………………………………………
K2
K1
L1 L2
Labour (L)
C
a
p
i
t
a
l
y
x

6. Example1.

7. Thank you…