Question:
Total cost curve of a firm is a
Total cost curve of a firm is a
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Cost, income, output, consumption, and investment are flow concepts because they are measured over a period of time.
Updated On: May 22, 2026
- Flow concept
- Stock concept
- Neither flow nor stock
- Either flow or stock
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The Correct Option is A
Solution and Explanation
Concept: A flow concept is measured over a period of time, while a stock concept is measured at a particular point of time.
Step 1: Understanding flow concept.
A flow variable has a time dimension. Examples are income per month, production per year, investment per year, and cost per period. \[ \text{Flow} = \text{Measured over a period of time} \]
Step 2: Understanding total cost.
Total cost of a firm is the cost incurred for producing output during a particular period. \[ TC = TFC + TVC \] Here, total cost is related to production during a time period.
Step 3: Identifying the nature of total cost curve.
Since total cost is measured over a period of time, it is a flow concept. Therefore, the correct answer is Flow concept.
Step 1: Understanding flow concept.
A flow variable has a time dimension. Examples are income per month, production per year, investment per year, and cost per period. \[ \text{Flow} = \text{Measured over a period of time} \]
Step 2: Understanding total cost.
Total cost of a firm is the cost incurred for producing output during a particular period. \[ TC = TFC + TVC \] Here, total cost is related to production during a time period.
Step 3: Identifying the nature of total cost curve.
Since total cost is measured over a period of time, it is a flow concept. Therefore, the correct answer is Flow concept.
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