Examples of cost of production: 1. Sunk Cost and Future Cost 2. Actual Cost 3. Opportunity Cost 4. Explicit Cost 5. Implicit Cost 6. Money Cost and Real Cost 7. Private Cost and Social Cost 8. Selling Cost 9. Overhead Cost. Example # 1. Sunk Cost and Future Cost: Expenditure which has been incurred in past and which cannot be [...]
The concept of cost of production is used in economics in three important senses to explain its nature. They are: 1. Money Cost of Production 2. Real Cost of Production 3. Opportunity Cost. 1. Money Cost of Production: Money cost represents the monetary expenses of production of the firm. It includes the amounts of money paid out or contracted to [...]
The upcoming discussion will update you about the differences between explicit cost and implicit cost. When most people think of cost, they think only of the explicit cost — the actual payment by firms to labour, capital, and other factors of production. Whether these costs are fixed or variable, they are straightforward: they are the amounts that firms must pay [...]