What Is Theory Of Production Of Cost In Economics?


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Keshwin Lata Prasad Profile
In economics, the cost-of-production theory of value is the belief that the value of an object is decided by the resources that went into making it. The cost can be composed of any of the factors of production including labour, capital, land, or technology.
Two of the most common cost-of-production theories are the medieval just price theory and the classical labor theory of value.
Anonymous Profile
Anonymous answered
The firm's primary objective in producing output is to maximize profits. The production of output, however, involves certain costs that reduce the profits a firm can make. The relationship between costs and profits is therefore critical to the firm's determination of how much output to produce.

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