There are three concepts of costs, namely:
1. Alternative costs (Opportunity cost); usually referred to as "social costs")
These costs are relatively most important for economists, because the incidence of these costs related to the scarcity and limited resources. For example, if the producers decided to make the specified input could have for other goods, so there are sacrificed.
2. Accounting costs (Cost Account)
Costs incurred by large producers to a production. For example, depreciation costs, historical costs, etc..
3. The cost of Economics (Economic Cost).
The cost of showing how costs for resources can be used in a production process.
Short-Term Cost Differences With Long-Term
In a production process we can recognize, the existence of short-term costs. Where in a production process is the input variable and fixed inputs can not be quickly keseluuruhannya; and tend to change when there are changes in production.
As for the long term, rather that the input can be as a whole and can be changed to a production change.
2. Total cost of Short Term
There are two kinds of input that is fix (fixed) and variable. So the fixed cost is the sum of the two types of fees earlier.
TC = FC + VC
FC = fixed cost
VC = variable cost
TC = total cost.
Fixed costs are used to pay the fixed inputs, while the input variable to the variable pay.
3. The average cost of Short Term (Short Form Average Cost)
the total cost of the units of output. So the average cost of means indicates the cost required to produce per unit of output.
AC = TC
Q
AC = Average Cost
TC = Total Cost
Q = Output
-The average cost of short-term: The sum of fixed costs on average (averager fixed cost) and variable costs on average (average variable cost).
AVC = TVC
Q
The cost of fixed-average (average fixed cost) is a fixed cost per unit of output produced. So the total cost of the average = Average - Total Cost.
AC = AVC + AFC.
4. Marginal costs (Marginal Cost)
changes that occur due to the cost of changing one unit of output.
MC = Change Fixed costs = TC
Change Output Q
From the above we can prove that at the minimum AC, then the value of MC = AC. The amount of fixed cost in the above graph is the difference between the AC and AVC.
5. Isocost: The curve describing the constraints faced by producers, namely the number of inputs or limited funds.
Isocost also curve showing the combination of two inputs that can be used to produce output with the same cost.
Description: If an employer has a fund i, and the funds used to buy inputs K and L with prices PK and PL, then:
IC = KPK + MPA
L = i - PK K or K = i - PL L
PK PK PL PL
Intercep (crossover point) on how many items purchased if all the funds owned to buy the K = i / PK
6. Minimum fee (Least Cost Combination)
A rational producer will produce at the lowest cost in accordance with economic principles: the maximum penhasilan with minimum cost.
These conditions can be achieved by two approaches:
a. If the funds are owned by the producers limited the lowest cost can be achieved if a particular fund can be produced with sebesarbesarnya output.
b. If you want to output a specific result comb the least. cost can be achieved if the necessary funds to produce such output is as low as low.
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