##### Asked by: Deolinda Gilah

asked in category: General Last Updated: 21st March, 2020# What is the relationship between production and cost?

**costs**vary in

**relation**to the quantity of goods being produced. Long run average

**cost**includes the variation of quantities used for all inputs necessary for

**production**. When the average

**cost**declines, the marginal

**cost**is less than the average

**cost**.

Also to know is, what is the relationship between production and cost function?

We derive the **cost function** from the **production function**, the prices of the inputs, and the target output. For a Leontief **production function**, the **cost function** is simply the sum of the **cost** of the inputs (quantity of each input times the price of that input) required to **product** the target output.

Similarly, what is the difference between cost and production? **Production costs** reflect all of the expenses associated **with a** company conducting its business while **manufacturing costs** represent only the expenses necessary to make the **product**. Both of these figures are used to evaluate the total expenses of operating a **manufacturing** business.

In this manner, what is the relationship between average product and average cost?

Therefore, AVC is inversely related to AP, i.e., when AP increases, AVC decreases. When AP is maximum, AVC attains its minimum point and when AP decreases, AVC increases.

**Relationship between average** variable **cost** and **average product**.

Marginal Product | Marginal Cost |
---|---|

Increasing | Decreasing |

At maximum | At minimum |

Decreasing | Increasing |

What is the relationship between total cost and marginal cost?

Answer: **Total cost** is the **total cost** incurred for producing a commodity. It is arrived when **Total** fixed **cost** and **Total** variable **cost** are added together. **Marginal cost** refers **to** an additional **cost** incurred **to** produce an additional unit **of** a commodity.