NCERT Books Class 12 Microeconomics Chapter 3- Production and Costs

Safalta Expert Published by: Noor Fatima Updated Fri, 22 Jul 2022 08:54 PM IST

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You may read NCERT Book for Class 12 Microeconomics Chapter 3 Production and Costs here. You may find links to Class 12 Microeconomics Notes, NCERT Solutions, Important Questions, Practice Papers, and more after each chapter.

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Table of Content
Topics Covered
Starting of the Chapter
Glimpses of the Chapter
PDF Link

The Chapter ' Production and Costs' explains the following-

3.1 PRODUCTION FUNCTION
3.2 THE SHORT RUN AND THE LONG RUN
3.3 TOTAL PRODUCT, AVERAGE PRODUCT AND MARGINAL PRODUCT
  • 3.3.1 Total Product
  • 3.3.2 Average Product
  • 3.3.3 Marginal Product
3.4 THE LAW OF DIMINISHING MARGINAL PRODUCT AND THE LAW OF VARIABLE PROPORTIONS
3.5 SHAPES OF TOTAL PRODUCT, MARGINAL PRODUCT AND AVERAGE PRODUCT CURVES
3.6 RETURNS TO SCALE
3.7 COSTS
  • 3.7.1 Short Run Costs
  • 3.7.2 Long Run Costs 

'Production and Costs' Goes Like This-

In the previous chapter, we have discussed the behaviour of the consumers. In this chapter as well as in the next, we shall examine the behaviour of a producer. Production is the process by which inputs are transformed into ‘output’. Production is carried out by producers or firms. A firm acquires different inputs like labour, machines, land, raw materials etc. It uses these inputs to produce output. This output can be consumed by consumers, or used by other firms for further production. For example, a tailor uses a sewing machine, cloth, thread and his own labour to ‘produce’ shirts. A farmer uses his land, labour, a tractor, seed, fertilizer, water etc to produce wheat. A car manufacturer uses land for a factory, machinery, labour, and various other inputs (steel, aluminium, rubber etc) to produce cars. A rickshaw puller uses a rickshaw and his own labour to ‘produce’ rickshaw rides. A domestic helper uses her labour to produce ‘cleaning services’.

We make certain simplifying assumptions to start with. Production is instantaneous: in our very simple model of production no time elapses between the combination of the inputs and the production of the output. We also tend to use the terms production and supply synonymously and often interchangeably.

In order to acquire inputs a firm has to pay for them. This is called the cost of production. Once output has been produced, the firm sell it in the market and earns revenue. The difference between the revenue and cost is called the firm’s profit. We assume that the objective of a firm is to earn the maximum profit that it can.

In this chapter, we discuss the relationship between inputs and output. Then we look at the cost structure of the firm. We do this to be able to identifiy the output at which firms profits are maximum.

3.1 PRODUCTION FUNCTION

The production function of a firm is a relationship between inputs used and output produced by the firm. For various quantities of inputs used, it gives the maximum quantity of output that can be produced.

Consider the farmer we mentioned above. For simplicity, we assume that the farmer uses only two inputs to produce wheat: land and labour. A production function tells us the maximum amount of wheat he can produce for a given amount of land that he uses, and a given number of hours of labour that he performs. Suppose that he uses 2 hours of labour/ day and 1 hectare of land to produce a maximum of 2 tonnes of wheat. Then, a function that describes this relation is called a production function.
 

Glimpses of the Chapter are-

 















Scroll down to get the PDF download link.

Download the NCERT Book for Microeconomics, Class 12 in PDF.

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NCERT Book for Class 12 Microeconomics Chapter 3 Production and Costs- PDF Download

Microeconomics Chapter 3
Production and Costs

Where can you download ‘Production and Costs' PDF?

Candidates can download NCERT Books Class 12 Microeconomics Chapter 3- Production and Costs PDF for free on our page. Links are given below.
 
Microeconomics Chapter 3 Production and Costs

What topics are covered in ‘Production and Costs’ Chapter?

3.1 PRODUCTION FUNCTION
3.2 THE SHORT RUN AND THE LONG RUN
3.3 TOTAL PRODUCT, AVERAGE PRODUCT AND MARGINAL PRODUCT
  • 3.3.1 Total Product
  • 3.3.2 Average Product
  • 3.3.3 Marginal Product
3.4 THE LAW OF DIMINISHING MARGINAL PRODUCT AND THE LAW OF VARIABLE PROPORTIONS
3.5 SHAPES OF TOTAL PRODUCT, MARGINAL PRODUCT AND AVERAGE PRODUCT CURVES
3.6 RETURNS TO SCALE
3.7 COSTS
  • 3.7.1 Short Run Costs
  • 3.7.2 Long Run Costs 

Are the CBSE Books for Class 12 Microeconomics significant for board exams?

For higher courses and board exams, the chapters in the CBSE Books for Class 12 Microeconomics are essential. For Class 12 Accountancy, students should read the chapter provided in the CBSE books. These examples and drill questions can help you get high marks.
 
We offer practice test questions to assist you sharpen your exam preparations and earn top grades. E-books can also be downloaded if you want to prepare even more thoroughly.

Is NCERT enough for Microeconomics Class 12?

Yes, these are. The book can also assist in dispelling uncertainties. Studying from the NCERT Book for Class 12 Microeconomics also has the following advantages:
  • The NCERT Books Class 12 Microeconomics provides students with in-depth knowledge of Economics.
  • The course books include illustrations that might aid students in comprehending the chapters.
  • These books can aid learners in independent study

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