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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 relation between marginal cost. and average variable cost.
✓

Answer

Cost in economics refers to the sum of actual money expenditure on inputs and the imputed expenditure in the form of inputs supplied by the owners including normal profit.
If MC < AVC, then AVC falls.
If MC = AVC, then AVC is constant.
If MC > AVC, then AVC rises.

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