Briefly explain the concept of the cost function. - Vidyadip

Question

Briefly explain the concept of the cost function.

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Answer

Cost function refers to the functional relationship between cost and output. It studies the behaviour of cost at different levels of output, when technology is assumed to be constant. It can be expressed as under:
$\quad$$\quad$$\quad$$\quad$C = f (Q)
Here, C = Cost of production; and Q = Quantum of output.

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