Briefly explain the concept of the cost function.
The functional relationship between the cost of production and the output is called the cost function. It is expressed as
C = f ( Qx )
Where,
C = cost of production
Qx =units of output x produced
In other words, the output-cost relationship for a firm is depicted by the cost function. The cost function depicts the least cost combination of inputs associated with different output levels.
The following table shows the total revenue and total cost schedules of a competitive firm. Calculate the profit at each output level. Determine also the market price of the good.
Quantity Sold | TR (Rs.) | TC (Rs.) | Profit |
---|---|---|---|
0 1 2 3 4 5 6 7 |
0 5 10 15 20 25 30 35 |
5 7 10 12 15 23 33 40 |
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Welcome to the NCERT Solutions for Class 12 Micro Economics - Chapter . This page offers a step-by-step solution to the specific question from Excercise 1 , Question 12: Briefly explain the concept of the cost function. ....
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