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Examveda

The capital that is consumed by an economy or a firm in the production process is known as

A. Capital loss

B. Production cost

C. Dead-weight loss

D. Depreciation

Answer: Option D

Solution(By Examveda Team)

The capital that is consumed by an economy or a firm in the production process is known as Depreciation. In economics, depreciation is the gradual decrease in the economic value of the capital stock of a firm, nation or other entity, either through physical depreciation, obsolescence or changes in the demand for the services of the capital in question.

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Comments ( 12 )

  1. Avsum Altaf
    Avsum Altaf :
    9 months ago

    While producing good in short run, we use fixed (capital) and variable (labour) if we increase the production we have to increase the labour and also having wear and tear to capital ( reaming is still as capital) , so we cost depreciation to the capital.

  2. Aqeel Alvi
    Aqeel Alvi :
    2 years ago

    how

  3. Ajay Sah
    Ajay Sah :
    3 years ago

    why not production cost....can anyone explain

  4. Movie World
    Movie World :
    4 years ago

    It should be "Capital"

  5. Movie World
    Movie World :
    4 years ago

    How?

  6. Samir Nayak
    Samir Nayak :
    4 years ago

    The capital that is consumed by an economy or a firm which is an expenditure bear by firm called as wear and tear cost. :)

  7. Rukhsar Saifi
    Rukhsar Saifi :
    4 years ago

    Is'nt it production cost? If m ryt

  8. Ritika Maurya
    Ritika Maurya :
    5 years ago

    I think I got it. Capital is the factor of production and not the cost of production. Am I right?

  9. Ritika Maurya
    Ritika Maurya :
    5 years ago

    land, labour and capital are the production cost, isn't it? then why depreciation?

  10. Safdar Alam
    Safdar Alam :
    5 years ago

    how

  11. Sumitra Jnyan
    Sumitra Jnyan :
    5 years ago

    Depreciation in general said as the cost of wearing and tearing in the production process. how you said 'D' the right answer?

  12. Pooja Singh
    Pooja Singh :
    5 years ago

    I didn't get

Related Questions on Economics

Which among the following statement is INCORRECT?

A. On a linear demand curve, all the five forms of elasticity can be depicted

B. If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.

C. If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.

D. The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.