Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | Briefly explain the concept of the cost

What is the total product of input?

Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve? 

Let the production function of a firm be Q=5L1/2K1/2Q=5L1/2K1/2 Find out the maximum possible output that the firm can produce with 100 units of LL and 100 units of KK.

What does the average fixed cost curve look like? Why does it look so? 

What do the long-run marginal cost and the average cost curves look like? 

When does a production function satisfy decreasing returns to scale? 

Explain the concept of a production function

Explain the relationship between the marginal products and the total product of an input. 

Why is the short-run marginal cost curve 'U'-shaped? 

At which point does the SMC curve intersect the SAC curve? Give a reason in support of your answer. 

What would be the shape of the demand curve so that the total revenue curve is?

(a) A positively sloped straight line passing through the origin?

(b) A horizontal line?

Explain market equilibrium.

Discuss the central problems of an economy.

What are the characteristics of a perfectly competitive market?

What do you mean by the budget set of a consumer?

From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:

When do we say that there is an excess demand for a commodity in the market?

What do you mean by the production possibilities of an economy?

How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?

What is budget line?

What do you mean by substitutes? Give examples of two goods which are substitutes of each other.

List the three different ways in which oligopoly firms may have.

What will happen if the price prevailing in the market is?

i. Above the equilibrium price

Ii. Below the equilibrium price

Suppose the demand and supply curve of commodity XX in a perfectly competitive market are given by:

qD =700 - p

qs = 500 + 3p for p ≥ 15

= 0 or 0 ≤ p <15

Assume that the market consists of identical firms. Identify the reason behind the market supply of commodity X being zero at any price less than Rs 15. What will be the equilibrium price for this commodity? At equilibrium, what quantity of X will be produced?

Why is the total revenue curve of a price-taking firm an upward-sloping straight line? Why does the curve pass through the origin?

A monopoly firm has a total fixed cost of Rs 100 and has the following demand schedule:

Find the short run equilibrium quantity, price and total profit. What would be the equilibrium in the long run? In case the total cost is Rs.1000, describe the equilibrium in the short run and in the long run.

What is the reason for the long run equilibrium of a firm in monopolistic competition to be associated with zero profit?

Suppose a consumer’s preferences are monotonic. What can you say about her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?

Explain why the budget line is downward sloping.

If a consumer has monotonic preferences, can she be indifferent between the
bundles (10, 8) and (8, 6)?