Question

a) Define commodity. b) Define the total cost of producing a commodity (π).

a) Define commodity.

b) Define the total cost of producing a commodity (π).

Homework Answers

Answer #1

a. Commodity :-

  • A commodity refers to any good that can be interchanged, traded, bought and sold.
  • They are the basic valuable input goods that are usually used as inputs during the production of final goods.

b.

  • The total cost of producing a commodity refers to the overall cost of incured by a firm in producing a particular commodity or a good.
  • In other words, the total cost of producing a commodity is the amount of money required for the use of the various factors of production like the land, labour, machinery, raw materials etc inorder to produce a certain quantity of output.
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