Cost Concepts Of Costs, And Traditional And Modern Theories Of Cost

850 WordsFeb 22, 20164 Pages
Cost Theory: Introduction: The firm’s Costs determine its supply. Supply along with demand determines price. To under-stand the process of price determination and the forces behind supply, we must understand the nature of Costs. We study some important concepts of Costs, and traditional and modern theories of Cost. Contents: 1. Introduction 2. Cost concepts 3. The Cost Function 4. Cost-Output Relation 5. The Modern Theory of Costs 6. Economies of Scale and the LAC Curve 7. Elasticity of Cost 8. Elasticity of Productivity Cost concepts: Cost are critical in business choice making. Expense of creation gives the floor to estimating. It helps chiefs to take right choices, for example, what cost to cite, whether to put in a specific request for inputs or not whether to desert or add an item to the current product offering et cetera. Customarily, Costs allude to the cash costs brought about by a firm in the creation process. In any case, in financial aspects, Cost is utilized as a part of a more extensive sense. Here, Costs incorporate attributed estimation of the business visionary 's own particular assets and administrations, and in addition the compensation of the proprietor administrator. There are different ideas of Cost that a firm considers applicable under different circumstances. To settle on a superior business choice, it is key to know the central contrasts and employments of the fundamental ideas of Cost. Bookkeeping and Economic Costs: Cash Costs are the
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