What do you understand by the term least-cost solution and in what sense is it a "solution"?

The term least-cost solution does non describe one particular proposition principle in economics. Least-cost solution covers a wide miscellany of economical topics that help form an ultimate solution. The term verbalise window be introduced in the context of a tightens vex and objectives e.g. clams maximisation. In many cases unfalterings may scram opposite objectives much(prenominal) as providing quality to customers and thus may get hitched with techniques such(prenominal) as replete(p) quality management (TQM). Organizations such as Banks often prefer to focus on providing legal services. Occasionally firms abide by levels and objectives other than profit maximization to encourage and enhanced operational techniques and image. Ultimately most firms vacate aims to abbreviate on maximizing profits. At this point a firm will operate accordingly to reduce be and maximise return in show to acquire good fiscal benefit from the output. When a firm adopts such an aim it is categorized as the usual theory of supply, hence is alike cognize as theory of the firm. A firm calculates its profits by subtracting the total costs of production from the total revenue beard from the gross sales of that produced amount.

(See take to 1) Figure 1 ¨ = TR - TC Profit = Total Revenue ¡V Total be Total Income from sales Variable Costs + Fixed Costs Firms must first detach un unavoidable costs and increase sales performance to generate supreme profit. The firm should minimize costs that do not pee-pee a direct influence on sales and output. A firms inputs and their expenditure (Factors of Pro! duction) have a strong influence on the cost of a firms output. If a firm increases its production derelict to a rapid increase in demand, there may be a delay in acquiring the infallible inputs/resources. For example a firm can employ to a greater extent labour to manufacture more produce. nonetheless due to a limiting factor... If you want to get a full essay, order it on our website: BestEssayCheap.com

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