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Page 1
NCERT
SOLUTIONS
CLASS - 12th
aglase .co
SOLUTIONS
CLASS - 12th
aglase .co
Page 2
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Class : 12th
Subject : Economics
Chapter : 3
Chapter Name : Production and Costs
Q1 Explain the concept of production function?
Answer. Production function exhibits a functional relation between physical input and physical
output.
Algebraically production function can be written as
L= Labour used in production,
K= Capital used in production
Q stands for output produced.
Page : 50 , Block Name : Exercises
Q2 What is the total product of an input?
Answer. Total product refers to the total amount of physical output that is produced with the use
of some physical input say, labour and capital during a particular period of time.
Total product = Total output from the given input.
Page : 50 , Block Name : Exercises
Q3 What is the average product of an input?
Page 1 of 19
Class : 12th
Subject : Economics
Chapter : 3
Chapter Name : Production and Costs
Q1 Explain the concept of production function?
Answer. Production function exhibits a functional relation between physical input and physical
output.
Algebraically production function can be written as
L= Labour used in production,
K= Capital used in production
Q stands for output produced.
Page : 50 , Block Name : Exercises
Q2 What is the total product of an input?
Answer. Total product refers to the total amount of physical output that is produced with the use
of some physical input say, labour and capital during a particular period of time.
Total product = Total output from the given input.
Page : 50 , Block Name : Exercises
Q3 What is the average product of an input?
Page 1 of 19
Page 3
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Answer. The average product is the ratio of total product to the variable factors used in the
production.
Average product = Total product / No. of variable units used
It can also be defined as the output per unit of variable factor.
Page : 50 , Block Name : Exercises
Q4 What is the marginal product of an input?
Answer. Marginal product is the change in the total product due to use of additional variable
factors used in production. Algebraically, .
Image source - NCERT
Page : 50 , Block Name : Exercises
Q5 Explain the relationship between the marginal product and the total product of an input.
Answer. The relationship between the marginal product and total product is-
i) Initially total product increases at an increasing rate for which marginal product increases.
ii) Then the total product increases at a decreasing rate for which marginal product decreases.
iii) Total product attains maximum point for which marginal product is zero.
iv) Finally total product decreases for which marginal product becomes negative.
Page 2 of 19
Answer. The average product is the ratio of total product to the variable factors used in the
production.
Average product = Total product / No. of variable units used
It can also be defined as the output per unit of variable factor.
Page : 50 , Block Name : Exercises
Q4 What is the marginal product of an input?
Answer. Marginal product is the change in the total product due to use of additional variable
factors used in production. Algebraically, .
Image source - NCERT
Page : 50 , Block Name : Exercises
Q5 Explain the relationship between the marginal product and the total product of an input.
Answer. The relationship between the marginal product and total product is-
i) Initially total product increases at an increasing rate for which marginal product increases.
ii) Then the total product increases at a decreasing rate for which marginal product decreases.
iii) Total product attains maximum point for which marginal product is zero.
iv) Finally total product decreases for which marginal product becomes negative.
Page 2 of 19
Page 4
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Land Labour TP MP
2 0 0 -
2 1 12 12
2 2 29 14
2 3 46 17
2 4 62 16
2 5 75 13
2 6 84 9
2 7 88 4
2 8 90 2
2 9 90 0
2 10 88 -2
2 11 84 -4
2 12 78 -6
In MP column, 12, 14, 17 belongs to IRF that is increasing returns to factor ; 16, 13, 9, 4, 2, 0
belongs to DRF that is decreasing returns to factor and -2, -4, -6 belongs to NRF negative
returns to factor.
Page : 50 , Block Name : Exercises
Page 3 of 19
Land Labour TP MP
2 0 0 -
2 1 12 12
2 2 29 14
2 3 46 17
2 4 62 16
2 5 75 13
2 6 84 9
2 7 88 4
2 8 90 2
2 9 90 0
2 10 88 -2
2 11 84 -4
2 12 78 -6
In MP column, 12, 14, 17 belongs to IRF that is increasing returns to factor ; 16, 13, 9, 4, 2, 0
belongs to DRF that is decreasing returns to factor and -2, -4, -6 belongs to NRF negative
returns to factor.
Page : 50 , Block Name : Exercises
Page 3 of 19
Page 5
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Q6 Explain the concept of short run and long run?
Answer. Short run refers to a time period in which there exist some fixed factors of production
and some variable factors of production. Thus we can say that there will be change in the level
of production during the short run.
Long run refers to a time period in which all the factors are variable and thus can be changed.
Due to this, there will be a change in the scale of production.
Page : 50 , Block Name : Exercises
Q7 What is Law of Diminishing Marginal Product?
Answer. According to the Law of Diminishing Marginal Product, when total product increases at
a decreasing rate with employment of more variable factors combined with the fixed factors of
production then marginal product decreases.
Page : 50 , Block Name : Exercises
Q8 What is the Law of Variable Proportion?
Answer. Law of Variable Proportion is a short run analysis. According to the law, keeping at
least one factor of production fixed, by changing the variable factor of production, the ratio of
fixed and variable factor changes for which total product and marginal product changes in the
following ways-
i) Initially Total product increases at an increasing rate for which the marginal product increases.
(Increasing returns to factor)
ii)Then the Total product increases at a decreasing rate, for which marginal product decreases.
(Diminishing returns to factor)
iii) Finally Total product attains maximum point leading to marginal product Zero.
Page 4 of 19
Q6 Explain the concept of short run and long run?
Answer. Short run refers to a time period in which there exist some fixed factors of production
and some variable factors of production. Thus we can say that there will be change in the level
of production during the short run.
Long run refers to a time period in which all the factors are variable and thus can be changed.
Due to this, there will be a change in the scale of production.
Page : 50 , Block Name : Exercises
Q7 What is Law of Diminishing Marginal Product?
Answer. According to the Law of Diminishing Marginal Product, when total product increases at
a decreasing rate with employment of more variable factors combined with the fixed factors of
production then marginal product decreases.
Page : 50 , Block Name : Exercises
Q8 What is the Law of Variable Proportion?
Answer. Law of Variable Proportion is a short run analysis. According to the law, keeping at
least one factor of production fixed, by changing the variable factor of production, the ratio of
fixed and variable factor changes for which total product and marginal product changes in the
following ways-
i) Initially Total product increases at an increasing rate for which the marginal product increases.
(Increasing returns to factor)
ii)Then the Total product increases at a decreasing rate, for which marginal product decreases.
(Diminishing returns to factor)
iii) Finally Total product attains maximum point leading to marginal product Zero.
Page 4 of 19
Page 6
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
iv) Finally Total product decreases for which marginal product becomes negative. (Negative
returns to factor)
Page : 50 , Block Name : Exercises
Q9 When does a production function satisfy constant returns to scale?
Answer. Constant returns to scale is the second stage in the law of returns to scale. It takes
place in the long run when the proportionate increase in all the factors of production leads to an
increase in the output in the same proportion. For example, if the proportionate increase in the
factors of production by 15% leads to an increase in output by 15%, then it is termed as the
constant returns to scale.
Page : 50 , Block Name : Exercises
Q10 When does a production function satisfies increasing returns to scale?
Answer. Increasing returns to scale is the stage when the proportion increase in all the factors
of production leads to a greater increase in the output. It takes place in the long run when the
firm enjoys economies of scale for large scale production.
For example, if the proportionate increase in the factors by 10% leads to a 15% increase in the
output, then it is situation of increasing returns to scale.
Page : 50 , Block Name : Exercises
Q11 When does a production function satisfy decreasing returns to scale?
Answer. Diminishing returns to scale is the stage when the proportion increase in all the factors
of production leads to a lesser increase in the output. It takes place in the long run when the firm
enjoys diseconomies of scale for large scale production.
Page 5 of 19
iv) Finally Total product decreases for which marginal product becomes negative. (Negative
returns to factor)
Page : 50 , Block Name : Exercises
Q9 When does a production function satisfy constant returns to scale?
Answer. Constant returns to scale is the second stage in the law of returns to scale. It takes
place in the long run when the proportionate increase in all the factors of production leads to an
increase in the output in the same proportion. For example, if the proportionate increase in the
factors of production by 15% leads to an increase in output by 15%, then it is termed as the
constant returns to scale.
Page : 50 , Block Name : Exercises
Q10 When does a production function satisfies increasing returns to scale?
Answer. Increasing returns to scale is the stage when the proportion increase in all the factors
of production leads to a greater increase in the output. It takes place in the long run when the
firm enjoys economies of scale for large scale production.
For example, if the proportionate increase in the factors by 10% leads to a 15% increase in the
output, then it is situation of increasing returns to scale.
Page : 50 , Block Name : Exercises
Q11 When does a production function satisfy decreasing returns to scale?
Answer. Diminishing returns to scale is the stage when the proportion increase in all the factors
of production leads to a lesser increase in the output. It takes place in the long run when the firm
enjoys diseconomies of scale for large scale production.
Page 5 of 19
Page 7
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
For example, if the proportionate increase in the factors by 15% leads to a 10% increase in the
output, then it is situation of increasing returns to scale.
Page : 51 , Block Name : Exercises
Q12 Briefly explain the concept of cost function?
Answer. Cost function exhibits the functional relation between expenditure incurred by the
producer and the output produced.
Algebraically,
,
where c= cost of production and Q= output produced.
Page : 51 , Block Name : Exercises
Q13 What are the total fixed cost, total variable cost and total cost of firm? How are they
related?
Answer. Total fixed cost is the expenditure incurred by the producer for hiring the fixed factors of
production. It remains constant throughout the production and is not dependent on the output
produced. It exists even when there is no production.
Total Variable cost refers to the expenditure incurred by the producer for hiring the variable
factor of production.
Total cost refers to the sum total of the total fixed cost and total variable cost.
Total cost= Total fixed cost + Total variable cost
TC= TFC + TVC
Units TFC TVC TC
Page 6 of 19
For example, if the proportionate increase in the factors by 15% leads to a 10% increase in the
output, then it is situation of increasing returns to scale.
Page : 51 , Block Name : Exercises
Q12 Briefly explain the concept of cost function?
Answer. Cost function exhibits the functional relation between expenditure incurred by the
producer and the output produced.
Algebraically,
,
where c= cost of production and Q= output produced.
Page : 51 , Block Name : Exercises
Q13 What are the total fixed cost, total variable cost and total cost of firm? How are they
related?
Answer. Total fixed cost is the expenditure incurred by the producer for hiring the fixed factors of
production. It remains constant throughout the production and is not dependent on the output
produced. It exists even when there is no production.
Total Variable cost refers to the expenditure incurred by the producer for hiring the variable
factor of production.
Total cost refers to the sum total of the total fixed cost and total variable cost.
Total cost= Total fixed cost + Total variable cost
TC= TFC + TVC
Units TFC TVC TC
Page 6 of 19
Page 8
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
0 20 - 20
1 20 20 40
2 20 22 42
3 20 27 47
4 20 30 50
5 20 22 53
Page : 51 , Block Name : Exercises
Q14 What are average fixed cost, average variable cost and average cost of a firm? How are
they related?
Answer.
1. Average fixed cost is the ratio of total fixed cost to output produced.
2. Average variable cost is the ratio of total variable cost to the output produced
3. Average cost is the ratio of total cost to output produced.
TC= TFC + TVC
Now, dividing the equation with Q, i.e. output produced.
AC= AFC + AVC
Page : 51 , Block Name : Exercises
Page 7 of 19
0 20 - 20
1 20 20 40
2 20 22 42
3 20 27 47
4 20 30 50
5 20 22 53
Page : 51 , Block Name : Exercises
Q14 What are average fixed cost, average variable cost and average cost of a firm? How are
they related?
Answer.
1. Average fixed cost is the ratio of total fixed cost to output produced.
2. Average variable cost is the ratio of total variable cost to the output produced
3. Average cost is the ratio of total cost to output produced.
TC= TFC + TVC
Now, dividing the equation with Q, i.e. output produced.
AC= AFC + AVC
Page : 51 , Block Name : Exercises
Page 7 of 19
Page 9
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Q15 Can there be some fixed cost in the long run? If not, Why?
Answer. No. In the long run only variable factors of production are employed, no fixed factor is
used. Thus only variable cost exist and not fixed cost.
Fixed costs are those costs which are incurred on the fixed factors of production.
Page : 51 , Block Name : Exercises
Q16 What does the average fixed cost look like? Why does it look so?
Answer. Average fixed cost looks like a rectangular hyperbola.
Average fixed cost is the ratio of total fixed cost to output produced. Here, total fixed cost
remains constant throughout. So with the increase in the unit of output, denominator of AFC
increases whereas, numerator which is TFC remains constant. So value of AFC keeps on falling
and it looks like a rectangular hyperbola.
Image source - NCERT
Page : 51 , Block Name : Exercises
Q17 What do the short run marginal cost, average variable cost and short run average cost
curve looks like?
Answer. Short run marginal cost, average variable cost and short run average cost curve looks
like U shaped.
Page 8 of 19
Q15 Can there be some fixed cost in the long run? If not, Why?
Answer. No. In the long run only variable factors of production are employed, no fixed factor is
used. Thus only variable cost exist and not fixed cost.
Fixed costs are those costs which are incurred on the fixed factors of production.
Page : 51 , Block Name : Exercises
Q16 What does the average fixed cost look like? Why does it look so?
Answer. Average fixed cost looks like a rectangular hyperbola.
Average fixed cost is the ratio of total fixed cost to output produced. Here, total fixed cost
remains constant throughout. So with the increase in the unit of output, denominator of AFC
increases whereas, numerator which is TFC remains constant. So value of AFC keeps on falling
and it looks like a rectangular hyperbola.
Image source - NCERT
Page : 51 , Block Name : Exercises
Q17 What do the short run marginal cost, average variable cost and short run average cost
curve looks like?
Answer. Short run marginal cost, average variable cost and short run average cost curve looks
like U shaped.
Page 8 of 19
Page 10
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Image source - NCERT
Page : 51 , Block Name : Exercises
Q18 Why does the SMC curve cuts the AVC curve at minimum point of AVC curve?
Answer. SMC is equal to AVC at AVC’s minimum point. When AVC decreases MC also
decreases but MC decreases more than AVC. MC intersects AVC at its minimum point and then
both MC and AVC increases but increase in MCis more than increase in AVC. So at point of
intersection which is their minimum point of AVC, MC curve cuts AVC curve.
Image source - NCERT
Page : 51 , Block Name : Exercises
Q19 At which point does the SMC curve cut the SAC curve? Give reasons in support of your
answer?
Answer. SMC(Short run marginal cost) curve cuts SAC(Short run average cost) curve at the
minimum point of SAC where both SAC and SMC are equal.
Page 9 of 19
Image source - NCERT
Page : 51 , Block Name : Exercises
Q18 Why does the SMC curve cuts the AVC curve at minimum point of AVC curve?
Answer. SMC is equal to AVC at AVC’s minimum point. When AVC decreases MC also
decreases but MC decreases more than AVC. MC intersects AVC at its minimum point and then
both MC and AVC increases but increase in MCis more than increase in AVC. So at point of
intersection which is their minimum point of AVC, MC curve cuts AVC curve.
Image source - NCERT
Page : 51 , Block Name : Exercises
Q19 At which point does the SMC curve cut the SAC curve? Give reasons in support of your
answer?
Answer. SMC(Short run marginal cost) curve cuts SAC(Short run average cost) curve at the
minimum point of SAC where both SAC and SMC are equal.
Page 9 of 19
Page 11
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
SMC and SAC falls but SMC falls more than SAC. It is evident from the graph that after attaining
minimum point SMC starts rising where AC is still falling. So SMC curve intersect SAC curve at
its minimum point.
Image source - NCERT
Page : 51 , Block Name : Exercises
Q20 Why is the short run marginal cost curve U shaped?
Answer. Marginal cost is derived from TVC .Initially TVC increases at a decreasing rate for
which marginal cost decreases .Thereafter, TVC increases at an increasing rate then MC
increases. The reason for decrease in MC in the initial stage lies in the Law of Variable
Proportion. During the initial stage marginal product increases corresponding to decrease in
marginal cost. When marginal product reaches maximum it corresponds to minimum point of
Marginal cost. When MP decreases, MC increases. Thus, MC is U shaped.
Page : 51 , Block Name : Exercises
Q21 What do the long run marginal cost and average cost curve look like?
Answer. Long run marginal cost and average cost curve is U shaped but flatter than the short
run average cost and marginal cost curve.
Page 10 of 19
SMC and SAC falls but SMC falls more than SAC. It is evident from the graph that after attaining
minimum point SMC starts rising where AC is still falling. So SMC curve intersect SAC curve at
its minimum point.
Image source - NCERT
Page : 51 , Block Name : Exercises
Q20 Why is the short run marginal cost curve U shaped?
Answer. Marginal cost is derived from TVC .Initially TVC increases at a decreasing rate for
which marginal cost decreases .Thereafter, TVC increases at an increasing rate then MC
increases. The reason for decrease in MC in the initial stage lies in the Law of Variable
Proportion. During the initial stage marginal product increases corresponding to decrease in
marginal cost. When marginal product reaches maximum it corresponds to minimum point of
Marginal cost. When MP decreases, MC increases. Thus, MC is U shaped.
Page : 51 , Block Name : Exercises
Q21 What do the long run marginal cost and average cost curve look like?
Answer. Long run marginal cost and average cost curve is U shaped but flatter than the short
run average cost and marginal cost curve.
Page 10 of 19
Page 12
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Image source - NCERT
Page : 51 , Block Name : Exercises
Q22 The following table gives the total product schedule of labour. Find the corresponding
average product and marginal product schedule of labour.
Labour TPl
0 0
1 15
2 35
3 50
4 40
5 48
Answer.
Page 11 of 19
Image source - NCERT
Page : 51 , Block Name : Exercises
Q22 The following table gives the total product schedule of labour. Find the corresponding
average product and marginal product schedule of labour.
Labour TPl
0 0
1 15
2 35
3 50
4 40
5 48
Answer.
Page 11 of 19
Page 13
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Labour TP AP MP
0 0 0 -
1 15 15 15
2 35 17.5 20
3 50 16.7 15
4 40 10 -10
5 48 9.6 8
Page : 51 , Block Name : Exercises
Q23 The following table gives the average product schedule of labour. Find the total product
and marginal product schedule. It is given that the total product is zero at zero level of labour
employment.
L 1 2 3 4 5 6
AP 2 3 4 4.25 4 3.5
Answer.
L AP TP MP
1 2 2 2
Page 12 of 19
Labour TP AP MP
0 0 0 -
1 15 15 15
2 35 17.5 20
3 50 16.7 15
4 40 10 -10
5 48 9.6 8
Page : 51 , Block Name : Exercises
Q23 The following table gives the average product schedule of labour. Find the total product
and marginal product schedule. It is given that the total product is zero at zero level of labour
employment.
L 1 2 3 4 5 6
AP 2 3 4 4.25 4 3.5
Answer.
L AP TP MP
1 2 2 2
Page 12 of 19
Page 14
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
2 3 6 4
3 4 12 6
4 4.25 17 5
5 4 20 3
6 3.5 21 1
Page : 51 , Block Name : Exercises
Q24 The following table gives the marginal product schedule of labour. It is also given; total
product of labour is zero level of employment. Calculate the total, average product schedule of
labour.
L 1 2 3 4 5 6
AP 3 5 7 5 3 1
Answer.
L AP TP MP
1 3 3 3
2 5 10 7
Page 13 of 19
2 3 6 4
3 4 12 6
4 4.25 17 5
5 4 20 3
6 3.5 21 1
Page : 51 , Block Name : Exercises
Q24 The following table gives the marginal product schedule of labour. It is also given; total
product of labour is zero level of employment. Calculate the total, average product schedule of
labour.
L 1 2 3 4 5 6
AP 3 5 7 5 3 1
Answer.
L AP TP MP
1 3 3 3
2 5 10 7
Page 13 of 19
Page 15
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
3 7 21 11
4 5 20 -1
5 3 15 -5
6 1 6 -9
Page : 51 , Block Name : Exercises
Q25 The following table shows the total cost schedule of a firm. What is the total fixed cost of
the firm? Calculate TVC, AFC, AVC, SAC and SMC schedule of firm.
Q 0 1 2 3 4 5 6
TC 10 30 45 55 70 90 120
Answer.
Q TC TVC AFC AVC TFC SAC SMC
0 10 0 - - 10 - -
1 30 20 10 20 10 30 20
2 45 35 5 17.5 10 22.5 15
Page 14 of 19
3 7 21 11
4 5 20 -1
5 3 15 -5
6 1 6 -9
Page : 51 , Block Name : Exercises
Q25 The following table shows the total cost schedule of a firm. What is the total fixed cost of
the firm? Calculate TVC, AFC, AVC, SAC and SMC schedule of firm.
Q 0 1 2 3 4 5 6
TC 10 30 45 55 70 90 120
Answer.
Q TC TVC AFC AVC TFC SAC SMC
0 10 0 - - 10 - -
1 30 20 10 20 10 30 20
2 45 35 5 17.5 10 22.5 15
Page 14 of 19
Page 16
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
3 55 45 3.33 15 10 18.3 10
4 70 60 2.5 15 10 17.5 15
5 90 80 2 16 10 18 20
6 120 110 1.7 18.3 10 20 30
TVC= TC – TFC
Page : 51 , Block Name : Exercises
Q26 The following table gives the total cost schedule of a firm. It is also given that the average
fixed cost at 4 units of output is Rs. 5. Find TVC, TFC, AVC, AFC, SAC and SMC schedules of
the given firm for the corresponding values of output.
Q 1 2 3 4 5 6
TC 50 65 75 95 130 185
Answer.
Page 15 of 19
3 55 45 3.33 15 10 18.3 10
4 70 60 2.5 15 10 17.5 15
5 90 80 2 16 10 18 20
6 120 110 1.7 18.3 10 20 30
TVC= TC – TFC
Page : 51 , Block Name : Exercises
Q26 The following table gives the total cost schedule of a firm. It is also given that the average
fixed cost at 4 units of output is Rs. 5. Find TVC, TFC, AVC, AFC, SAC and SMC schedules of
the given firm for the corresponding values of output.
Q 1 2 3 4 5 6
TC 50 65 75 95 130 185
Answer.
Page 15 of 19
Page 17
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Q TC TFC TVC AVC AFC SAC SMC
1 50 20 30 30 20 50 30
2 65 20 45 22.5 10 32.5 15
3 75 20 55 18.3 6.67 25 10
4 95 20 75 18.75 5 23.75 20
5 130 20 110 22 4 26 35
6 185 20 165 27.5 3.3 30.8 55
AFC at 4 units is Rs. 5
Therefore,
TVC= TC – TFC
Page : 52 , Block Name : Exercises
Page 16 of 19
Q TC TFC TVC AVC AFC SAC SMC
1 50 20 30 30 20 50 30
2 65 20 45 22.5 10 32.5 15
3 75 20 55 18.3 6.67 25 10
4 95 20 75 18.75 5 23.75 20
5 130 20 110 22 4 26 35
6 185 20 165 27.5 3.3 30.8 55
AFC at 4 units is Rs. 5
Therefore,
TVC= TC – TFC
Page : 52 , Block Name : Exercises
Page 16 of 19
Page 18
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Q27 A firm’s SMC schedule is shown in following table. The total fixed cost of the firm is Rs.
100. Find the TVC, TC, AVC, and SAC schedule of the firm.
Q 0 1 2 3 4 5 6
SMC - 500 300 200 300 500 800
Answer.
Q SMC TFC TVC TC AVC SAC
0 0 100 0 100 - -
1 500 100 500 600 500 600
2 300 100 800 900 400 450
3 200 100 1000 1100 333.33 366.6
4 300 100 1300 1400 325 350
5 500 100 1800 1900 360 380
6 800 100 2600 2700 433.3 450
Page : 52 , Block Name : Exercises
Q28 Let the production function of firm be . Find out the maximum possible
output that the firm can produce with 100 units of L and 100 units of K.
Page 17 of 19
Q27 A firm’s SMC schedule is shown in following table. The total fixed cost of the firm is Rs.
100. Find the TVC, TC, AVC, and SAC schedule of the firm.
Q 0 1 2 3 4 5 6
SMC - 500 300 200 300 500 800
Answer.
Q SMC TFC TVC TC AVC SAC
0 0 100 0 100 - -
1 500 100 500 600 500 600
2 300 100 800 900 400 450
3 200 100 1000 1100 333.33 366.6
4 300 100 1300 1400 325 350
5 500 100 1800 1900 360 380
6 800 100 2600 2700 433.3 450
Page : 52 , Block Name : Exercises
Q28 Let the production function of firm be . Find out the maximum possible
output that the firm can produce with 100 units of L and 100 units of K.
Page 17 of 19
Page 19
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
Answer.
Maximum possible output that the firm can produce with 100 units of L and 100 units of K is
500.
Page : 52 , Block Name : Exercises
Q29 Let the production function of a firm be . Find out the maximum possible
output that the firm can produce with 5 units of L and 2 units of K. What is the maximum
possible output that firm can produce with zero unit of L and 10 units of K?
Answer. i) When L=5 and K=2
ii) When L=0 and K=10
Maximum possible output that the firm can produce with zero unit of L and 10 units of K is 200
Page : 52 , Block Name : Exercises
Q30 Find the maximum possible output for a firm with zero unit of land 10 units of K when its
production function is Q=5L+2K.
Answer. Given :
Q=5L+2K
Page 18 of 19
Answer.
Maximum possible output that the firm can produce with 100 units of L and 100 units of K is
500.
Page : 52 , Block Name : Exercises
Q29 Let the production function of a firm be . Find out the maximum possible
output that the firm can produce with 5 units of L and 2 units of K. What is the maximum
possible output that firm can produce with zero unit of L and 10 units of K?
Answer. i) When L=5 and K=2
ii) When L=0 and K=10
Maximum possible output that the firm can produce with zero unit of L and 10 units of K is 200
Page : 52 , Block Name : Exercises
Q30 Find the maximum possible output for a firm with zero unit of land 10 units of K when its
production function is Q=5L+2K.
Answer. Given :
Q=5L+2K
Page 18 of 19
Page 20
Book : Introductory Microeconomics Ncert Solutions | Chapter - 3 Economics
L=0 units
K= 10 units
Therefore, Q= 5L+2K
Hence, Maximum output is 20 units.
Page : 52 , Block Name : Exercises
Page 19 of 19
L=0 units
K= 10 units
Therefore, Q= 5L+2K
Hence, Maximum output is 20 units.
Page : 52 , Block Name : Exercises
Page 19 of 19
Document Details
| Board / Org | NCERT |
| Exam | Class 12 |
| Type | Solution |
| Pages | 20 |
| Updated | 22 Jul 2026 |