In this article we will discuss about the measurement of opportunity cost. The reader will also be able to learn about whether opportunity cost can ever be zero or not. In truth, the central problem faced by every society is the allocation of scarce resources to satisfy as many wants as possible. The problem arises because of three characteristics of [...]
In this article we will discuss about the cost of an individual firm. Also learn about the nature of costs of an individual firm. To produce more output in the short run, a firm must employ more labour and buy more raw materials and other inputs. But, if the firm employs more labour and buys more of other inputs like [...]
In this article we will discuss about the relationship between marginal cost and average cost. The three cost curves TC, AC and MC describe the same physical data and are, therefore, related mathematically. Let TC (q) be the total cost of output q, AC (q), is defined as the total cost divided by the amount produced, or AC (q) = [...]