how do static variables inside functions work?

Question

In the following code:

int count(){
    static int n(5);
    n = n + 1;
    return n;
}

the variable n is instantiated only once a

Answer 1

This is entirely up to the implementation; the language standard says nothing about that.

In practice, the compiler will usually include a hidden flag variable somewhere that indicates whether the static variable has already been instantiated or not. The static variable and the flag will probably be in the static storage area of the program (e.g. the data segment, not the stack segment), not in the function scope memory, so you may have to look around about in the assembly. (The variable can't go on the call stack, for obvious reasons, so it's really like a global variable. "static allocation" really covers all sorts of static variables!)

Update: As @aix points out, if the static variable is initialized to a constant expression, you may not even need a flag, because the initialization can be performed at load time rather than at the first function call. In C++11 you should be able to take advantage of that better than in C++03 thanks to the wider availability of constant expressions.