Help me
I don't know what is a cost function and how it is formulated?
Can anyone tell me the basics of this function and method of formulating?
I will highly appriciate...

Check this site out, you need MS word or something equivalent and when the document is loaded, search for the word "cost"


www.math.tamu.edu/AppliedCalc/Workbook/Chapter1.doc

Work through the info provided at Mr. Gunther's link--it'll give you a fuller picture of linear functions in general, and how they work to model production costs, in the right situation.

If you're familiar with the general linear function

y = f(x) = mx + b

... then using this as a way of modeling your production costs, the Cast of Characters goes like this:

y represents your total costs, which are a result of your fixed costs + the variable costs;
m is the variable cost per unit produced;
x is the number of units produced; and
b represents your fixed costs.

You might be pleasantly surprised to find out that this is just a way of using symbols to say what you already know. If I said that fixed costs were $1,000 (no matter how many units I make), and also that my variable costs were 75 cents per unit produced, and I asked you how much it would cost me to make 100 units, you'd reason...

"75 cents times 100 units = $75, plus $1,000 fixed costs; OK it'd cost you $1,075 to make 100 units." Well, you just did y = mx + b in your head.

Best of luck!

...it was early and I was full of no coffee...

Sir I am extremely thankfull to you because I was striving for basic concepts.. and I hope that your text will help me in modifying my concpets... again thanks very much
GOD bless you

Thakyou brother for your kind help
I appriciate

Always a pleasure.

...it was early and I was full of no coffee...

hi there,

if it was a polynomial fuction such as, y= mx^2 - nx + b, what would be the variable cost in this case?

Fixed cost =b
Variable cost = (mx^2 - nx ) or (mx - n)x