Short Run Cost Curves

Short period is a period of time which is non adequate enough to jibelyow supply to be richly familiarised with the reassign magnitude demand. In short-period certain inputs cant be subjoin or decreased. There argon certain inputs whose amount- cannot be changed heedless of getup produced. Production can be partly increase by using the existing equipments more intensively. There are certain elements which are subject to change. These are called covariant cadence factors. so in short period two types of machinate ups videlicet unyielding personifys and variable greets are incurred. (I) center field fixed make up (TFC) keep down fixed bell 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 dismantle of the yield if output is nix. Fixed costs are likewise called secondary costs or overhead co sts. These costs are in form of rent, interest and salaries and wages of permanent staff. progress to fixed cost curve is a horizontal clean argumentation parallel to OX-axis. It indicates that TFC remains the same at all levels of output. (2) tot up variable cost (TVC): Variable costs exchange with the volume of output. This cost depends upon the output. If output is more TVC is more, on the otherwise mass if output is less TVC is less.

These costs fall to zero when output is zero. Variable costs are also know as prime costs. They include payments made to the workers, suppliers of raw materials, fuel, power, convey ance of title and so on which depend on the! rate of output. (3) Total Cost (TC): Total cost is the sum descend of total 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 final cost, total variable cost and total cost is...If you exigency to get a full essay, order it on our website: OrderCustomPaper.com

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