Cost-Output Relationship - 71034

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Describe Cost-Output Relationship in brief.

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Q. Definition of cost-output relationship

Ans: Cost output relationship or cost function refers to the relationship between cost and rate of output alone assuming all other independent variables are kept constant. It provides information about cost minimization or profit maximization and optimization of output.

TC=f (Q) Where TC= total cost and Q= output produced

Cost function depends upon-

a)     Production