In economics, the cost refers to the expenses that are faced by a producer while producing goods or services. These costs are mainly divided into four types: fixed cost, variable cost, average cost, and marginal cost. Fixed cost means the cost that remains the same even when output changes, while variable cost changes with the production level. Average cost shows the cost per unit, and marginal cost shows the cost of producing one extra unit. Understanding these concepts helps in decision-making by firms and is an important topic for competitive exams.
Economics Quiz: Cost Concepts and Analysis
Test your knowledge on fundamental cost concepts, including Average, Marginal, Opportunity, and Sunk costs, as well as economies of scale and profit calculations.
