Q.Define Cost.

Cost is the total money expenditure a firm incurs on the inputs and factor services used to produce a good.

In economics, cost of production refers to the total expenditure incurred by a producer on the various factors of production and inputs — such as raw materials, wages of labour, rent, interest and payment for other services — that are used to produce a given quantity of a commodity.

Cost can be looked at in several ways in the Tamil Nadu HSC Class-11 Economics syllabus:

• Explicit costs — actual money payments made to outsiders for hired factors and purchased inputs.
• Implicit costs — the estimated value of the producer's own factors used in production (own capital, own labour). …