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then he will have to forgo the rice production. So the opportunity cost

               of producing wheat is 50 quintals of rice.


               2.Explicit cost: are the money expenses incurred in purchasing various

               amount of input  used in the production of a commodity.


                                                                      OR

                        Cost of hired factors.(paid out cost)


               3.Implicit cost: Cost of self-owned resources , known as imputed cost.


                     Short run cost: In the short run two factors are used ie. Fixed factors &

                    Variable factors


               SHORT RUN COST




                    Total cost(TC)                 average cost(AC/ATC)            Marginal cost(MC)




                TFC            TVC                 AFC                   AVC

               TFC: Those costs which do not vary directly with  the level of output. TFC is


                         Present at the zero level of output. For eg.Rent of prod. Unit, Interest on


               Loan ,Salary of permanent staff, Insurance premium Depreciation&

                        Repair cost.(TFC is fixed for all levels of output.)
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