Short Run Cost Curves

Short period is a period of time which is non ample enough to every(prenominal)ow supply to be richly set with the reassign magnitude demand. In short-period certain inputs cant be amplification or decreased. There ar certain inputs whose amount- cannot be changed no matter of getup produced. Production can be partly change magnitude by using the existing equipments more intensively. There argon certain doers which are subject to change. These are called shifting measure factors. so in short period two types of apply ups videlicet unyielding personifys and variable lives are incurred. (I) load fixed address (TFC) keep down fixed hail is self-sufficient of the mountain of output. This cost remains unchanged irrespective of change in output. These costs are incurred on factor inputs which cant be changed in the short period. These costs continue nevertheless of the yield if output is cryptograph. Fixed costs are in addition called secondary costs or overhead costs. These costs are in form of rent, interest and salaries and wages of permanent staff. bang fixed cost curve is a horizontal refined argumentation parallel to OX-axis. It indicates that TFC remains the same at all levels of output. (2) native variable cost (TVC): Variable costs castrate with the volume of output. This cost depends upon the output. If output is more TVC is more, on the separate 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, point and so on which depend on the! rate of output. (3) Total Cost (TC): Total cost is the sum enumerate of come in 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-place cost, total variable cost and total cost is...If you regard to get a full essay, order it on our website: BestEssayCheap.com

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