COST FUNCTION IN MICRO ECONOMICS..

WHAT IS COST FUNCTION:_

                                                                  The expenditure incurred by the producer on factor as well as on non factor inputs is called as cost function.

TYPES OF COST FUNCTION:-

TOTAL FIXED COST{TFC}:-

The payment which are made by the producer on fixed factors during the process of production is called as fixed cost.Other name of fixed cost are * Supplementary cost

                                                                               *General cost

                                                                               *Indirect cost.

                                                                               *Unavoidable cost.

Ex-payment on building,machinery etc..

TOTAL VARIABLE COST {TVC}:-  

                                         The payment which are made on various variable factor during the production function is called as total variable cost.Other name of variable cost are*Prime cost
                                                                                                                                   *Avoidable cost
                                                                                                                                   *Direct cost
.EX:-Raw material,fuel, labour etc..

TOTAL COST{TC}:-       

                                         Total cost refers to the total expenditure,which is paid on fixed and variable factor during the production process is called total cost.

                              TC=TFC+TVC

               {source:-http://www2.owen.vanderbilt.edu/germain.boer/mgt413/cvp/cvp.html}