ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -As a result, a higher cost of production typically causes a firm to supply a smaller quantity at any given price. In this case, the supply curve shifts to the left.

Detailed explanation-2: -If the cost of production is lower, the profits available at a given price will increase, and producers will produce more. With more produced at every price, the supply curve will shift to the right, meaning an increase in supply.

Detailed explanation-3: -If a company increases its output in the short run, its total variable costs will rise. If a firm increases the production of its products, which it also needs to package, its variable costs will rise. This is because the firm will require a higher amount of packaging for the increased production output.

Detailed explanation-4: -For example, when production costs rise, the demand curve remains the same and allows for a comparison between the profits that would come from a higher price point (but decreased demand) and steady demand with a lower profit margin on each item sold.

Detailed explanation-5: -Marginal cost It shows the increase in total cost coming from the production of one more product unit. Since fixed costs remain constant regardless of any increase in output, marginal cost is mainly affected by changes in variable costs.