What do you mean by ‘Cost minimisation’. Explain the various approaches of cost minimisation, Give illustration in support of your answer.

Cost minimization refers to the process of determining the least-cost combination of inputs to produce a given level of output. In the context of microeconomics, firms aim to minimize the total cost of production while achieving their desired output level. This involves selecting the most efficient combination of labor, capital, and other resources to produce goods and services. The goal of cost minimization is to maximize profits or minimize losses by reducing unnecessary expenditures on inputs, while maintaining the desired production level.

There are several approaches to cost minimization, each based on different economic principles and models. The most commonly discussed approaches are the Isoquant-Isocost approach, the Least-Cost Rule, and the Lagrangian multiplier method.

Isoquant-Isocost Approach

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