Tiêu đề MEFA UNIT III pdf.pdf ✅

MANAGERIAL ECONOMICS (UNIT-3) Production and Cost analysis- Theory of production- production function. Law of variable proportions. Laws of returns to scale. Production Optimization. Least cost combination of inputs, isoquants. Cost concepts-explicit and implicit cost, Fixed and variable cost, Opportunity cost, sunk costs, cost function, cost curves, cost and output decisions, cost estimation.

• Production is a very important economic activity. • It is important both from the individual as well as the social points of view. • The standard of living of a people is the ultimate analysis which depends on the volume and variety of production. • The performance of an economy is judged by the level of its production. i.e. Those countries which produce goods in large quantities are rich and those which produce little of them are poor. • The term ‘Production’ in economics refers to the creation of those goods and services which have exchange value. • The process by which man utilises or converts the natural resources in one form to another and working upon them to satisfy the human wants. “Production as any activity whether physical or mental, which is directed to the satisfaction of other people’s wants through exchange.” – Prof. J. R. Hicks CONCEPT OF PRODUCTION