Mco 021

  UNIT 8 SHORT RUN COST ANALYSIS The analysis of cost is important in the study of managerial economics. There are two types of cost analysis: Short run cost analysis & Long run cost analysis.   Cost Concepts That are Relevant for Managerial Decisions.   Actual Costs And Opportunity costs Actual costs are those costs, which a firm incurs while producing or acquiring a good or service like raw materials, labour, rent, etc. Opportunity cost is defined as the value of a resource in its next best use.   Explicit and Implicit costs Explicit costs are those costs that involve an actual payment to other parties. implicit costs represent the value of foregone opportunities but do not involve an actual cash payment.   Accounting costs and Economic costs All the types of costs incurred by a firm while doing business are called accounting costs. All the actual and implied costs incurred by a firm are called economic costs.   Contr...