Briefly explain the concept of the cost function.
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Briefly explain the concept of the cost function.
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The functional relationship between the cost of production and the output is called the cost function. It is convey as

 C-f(Qx)

Where, 

C = Cost of production

 Qx = Units of output x produced / Quantity produced of x goods

 In other words, the output-cost relationship for a firm is depicted by the cost function.

 The cost function depicts the least cost amalgam of inputs connected with different output levels. 

Cost function of a firm depends on two things: 

► Production Function 

►Price of the factors of production: Higher the output of a firm, higher would be the production cost.

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