Detailed notes
Relate the production function, total/average/marginal product and returns to a factor. Short-run costs include TFC, TVC, TC, AFC, AVC, AC and MC; revenue includes TR, AR and MR. Producer equilibrium uses MR=MC with MC rising through MR. Supply and price elasticity of supply depend on price and other determinants; distinguish movement along the curve from a shift.
Worked interpretation
If TFC=₹40 and TVC at Q=4 is ₹120, TC=₹160, AFC=₹10, AVC=₹30 and AC=₹40. If TC at Q=5 is ₹190, MC of the fifth unit is ₹30. At price ₹50 and quantity 4, TR=₹200 and AR=₹50.
CBSE-style practice
- At output 4, total cost ₹160; at output 5, ₹190. Marginal cost over the interval is ₹30. If TFC=₹40 and TVC=₹120 at Q=4, AC=₹40. Elasticity of supply by percentage method compares percentage change in quantity supplied with percentage change in price.
- Draw a labelled graph or table where it clarifies your reasoning.
- State one limitation or assumption.
Quick revision
Define the term precisely, show formula substitutions when relevant, and distinguish a change in the variable from a change in its determinants.