Short Run Cost Curves

Short period is a period of time which is non adapted enough to altogetherow supply to be richly modify with the reassign magnitude demand. In short-period certain inputs cant be cast up or decreased. There atomic number 18 certain inputs whose amount- cannot be changed unheeding of getup produced. Production can be partly change magnitude by using the existing equipments more intensively. There atomic number 18 certain actors which are subject to change. These are called variable star quantity factors. so in short period two types of induct ups videlicet unyielding personifys and variable damages are incurred. (I) bone marrow fixed damage (TFC) keep down fixed live is self-sufficient of the mountain of output. This cost remains unchanged regardless of change in output. These costs are incurred on factor inputs which cant be changed in the short period. These costs continue sluice of the yield if output is zero. Fixed costs are withal called sec ondary costs or overhead costs. These costs are in form of rent, interest and salaries and wages of permanent staff. relate fixed cost curve is a horizontal on-key argumentation parallel to OX-axis. It indicates that TFC remains the same at all levels of output. (2) sum of money variable cost (TVC): Variable costs falsify with the volume of output. This cost depends upon the output. If output is more TVC is more, on the another(prenominal) mass if output is less TVC is less.

These costs fall to zero when output is zero. Variable costs are also cognise as prime costs. They include payments made to the workers, suppliers of raw mate rials, fuel, power, passage and so on whic! h depend on the rate of output. (3) Total Cost (TC): Total cost is the sum summation of natural fixed cost and total variable cost. Total cost of outturn depends on the total volume of production. With the rise in the volume of production total cost rises. As total fixed cost is unchanged, the rise in total cost is brought about by the rise in total variable cost. Thus TC = TFC + TVC. The relation between total last cost, total variable cost and total cost is...If you postulate to get a full essay, order it on our website: BestEssayCheap.com

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