5.2 Cost of Production

The amount of money a company brings in from one product

• Marginal Revenue

• Total revenue

• Profit-Maximizing Output

The amount of money earned from 

selling the max amount of product.

• Variable Cost

• Profit-Maximizing Output

• Marginal Cost

The total amount of money that is brought in from selling goods and services.

• Total Cost

• Marginal Revenue

• Total revenue

These are cost that a employer must pay regardless of their rate of production

• Variable Cost

• Fixed Cost

• Marginal Cost

These are cost that change as the level of production changes

• Variable Cost

• Total revenue

• Total Cost

This is the total of both the fixed and variable cost combined 

• Specialization

• Total Cost

• Marginal Cost

This is how much more it would cost to add one more product. 

• Marginal Product

• Marginal Cost

• Total Cost

This happens when a newly hired worker adds more to the total output, then before they joined.

• Marginal Cost

• Specialization

• Increasing Returns

This happens when a newly hired worker causes the total output to grow but at a decreasing rate. 

• Marginal Product

• Diminishing Returns

• Specialization

When each worker is assigned a specific task to complete, for a higher rate of production. 

• Total revenue

• Specialization

• Profit-Maximizing Output