Both graphical and mathematical expressions are presented and demonstrated. Variable Elasticity Substitution Production Function. Increasing marginal costs can be identified using the production function. There can be a number of different inputs to production, i.e. Constant Elasticity of Substitution Production Function and 4. Q=K 0.3 L 0.2: Again, we increase both K and L by m and create a new production function. Here we keep some inputs fixed. The production function is a simple description of the mechanism of income generation in production process. This relationship or the production function governs the level of production. Output is a function of inputs. If a firm has a production function Q=F(K,L) (that is, the quantity of output (Q) is some function of capital (K) and labor (L)), then if 2Q