Least-Cost Combination

The problem of least-cost combination of factors refers to a firm getting the largest volume of output from a given cost outlay on factors when they are combined in an optimum manner. In the theory of production, a producer will be in equilibrium when, given the cost-price function, he maximizes his profits on the basis […]

TYPES OF COSTS

There are many different types of costs that a firm may consider relevant for decision-making under varying situations. The manner in which costs are classified or defined is largely dependent on the purpose for which the cost data are being outlined. Explicit and Implicit Costs: The opportunity cost (or cost of the foregone alternative) of […]