Production Optimization: Generally, a profit-maximizing firm wants to determine which combination of factors of production (or inputs) would minimize its cost of production for a given output. This can be known by combining the firm’s production and cost functions, namely isoquants and iso-cost lines, respectively. Let us understand what we mean by isoquants. Isoquants: An […]
“Cost is a fundamental notion in economics.” It refers to the sum of money paid to get products and services. To put it another way, cost is a financial assessment of the resources, materials, hazards, time, and utilities consumed to acquire goods and services. Cost principles and interrelationships: Optimal input utilization and production. A farmer’s […]
MEANING OF PRODUCTION; What do you understand by production in common parlance? Well, the simple answer would be the term production is an activity of making something material. The following are the few examples of production: Growing of wheat, rice or any other agricultural crop by farmers.Manufacturing of cement, radio sets, wool machinery or any […]
