# NCERT Solutions Class 12 Economics Cost

## Cost Class 12 NCERT Solutions

Class 12 Economics students should refer to the following NCERT questions with answers for Cost in standard 12. These NCERT Solutions with answers for Grade 12 Economics will come in exams and help you to score good marks

### Cost NCERT Solutions Class 12

Question 1. Briefly explain the concept of the cost function.
Answer:  Cost function shows functional relationship between output and cost of production. It gives the least cost combination of inputs corresponding to different levels of output. Cost function is given as:
C = f(X), ceteris paribus,
where, C = Cost and X = Output

Question 2. What are total fixed cost, total variable cost and total cost of a firm? How are they related?
Or
Draw TVC, TC, and TFC curves in a single diagram. [AI 2012][CBSE Sample Paper 2013]
Answer: (i) TC is divided into two parts TFC and TVC such that TC = TFC + TVC.
(ii) TFC is the overhead cost and it remains constant or fixed whatever be  the level of output. TFC curve is a horizontal line parallel to the x- xis.
(iii) TVC is cost due to increased use of variable factors like raw material, labour, etc. TVC is inverse S-shaped starting from the origin due to law of variable proportion.
(iv) TC is aggregate of TFC and TVC. TC curve is inverse S-shaped starting from the level of fixed cost. The reason behind it shape is the law of variable proportion.

Question 3. What are the average fixed cost, average variable cost and average cost of a firm? How are they related?
Answer: AFC: The per unit cost incurred on fixed factors of production is known as average fixed cost.
AFC always decreases as the firm increases the level of production. AVC: It is variable cost per unit of output produced.

## Books recommended by teachers

 NCERT Solutions Class 12 Economics Introduction to Economics
 NCERT Solutions Class 12 Economics Demand NCERT Solutions Class 12 Economics Elasticity of Demand
 NCERT Solutions Class 12 Economics Cost NCERT Solutions Class 12 Economics Production
 NCERT Solutions Class 12 Economics Perfect Competition NCERT Solutions Class 12 Economics Producer Equilibrium NCERT Solutions Class 12 Economics Revenue NCERT Solutions Class 12 Economics Supply
 NCERT Solutions Class 12 Economics Consumer Equilibrium NCERT Solutions Class 12 Economics Excess Demand and Deficient Demand NCERT Solutions Class 12 Economics Market Equilibrium with Simple Applications
 NCERT Solutions Class 12 Economics Non-Competitive Market
 NCERT Solutions Class 12 Economics Introduction to Macroeconomics and its Concepts
 NCERT Solutions Class 12 Economics National Income and Related Aggregates
 NCERT Solutions Class 12 Economics Banking NCERT Solutions Class 12 Economics Money
 NCERT Solutions Class 12 Economics Aggregate Demand and Its Related Concepts NCERT Solutions Class 12 Economics National Income Determination and Multiplier
 NCERT Solutions Class 12 Economics Government Budget and the Economy
 NCERT Solutions Class 12 Economics Balance of Payment NCERT Solutions Class 12 Economics Foreign Exchange Rate