Opportunity Costs
Implicit and Explicit Costs
Economic Costs
Marginal
Incremental and Sunk Costs
Direct and Indirect Costs
Fixed and Variable Costs
Cost And Production Functions
Short Run Cost Functions
Long Run Cost Functions
Comparison between Long Run and Short Run
Break Even Analysis
Merits of
Break-even Analysis
Demerits of Break-even Analysis
Shutdown Point
Economies Of Scale
Real Economies of Scale
Pecuniary Economies of Scale Diseconomies of Scale
Economies of Scope
Chapter Summary
In this chapter we understood the importance of cost of
production or providing a service for a firm. The chapter started with
discussing various types of costs and later relationship between the cost and
production was studied. The behavior and the difference of cost curves in long
and short run were analyzed.
Later the importance of shut down point when the firm should close its operation
to avoid losses was discussed. The implications of break even analysis was also
discussed. Economies and diseconomies of scale with the cost perspective were
also discussed in the chapter.
Short Case Studies / Caselets
