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Production and cost — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsProduction and cost4 Marks
Question
Define cost. State the behaviour of (a) Total Fixed Cost and (b) Total Variable Cost as output is increased.
✓

Answer

Cost is the sum of actual money expenditure on inputs and imputed expenditure on inputs supplied by the owner, including normal profit. TFC remains unchanged as output is increased.
Initially TVC increases at decreasing rate upto a certain level of output and then increases at increasing rate.

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