What is the meaning of cost in economics?
Understand the Problem
The question is asking about the meaning of cost in economics, specifically regarding its components and implications for production. This requires an understanding of explicit costs, investments, and the broader economic context.
Answer
Cost is the total expenditure incurred to produce a good or service.
In economics, cost is the total expenditure incurred in producing a good or service. It includes both explicit costs (actual money spent) and implicit costs (opportunity costs).
Answer for screen readers
In economics, cost is the total expenditure incurred in producing a good or service. It includes both explicit costs (actual money spent) and implicit costs (opportunity costs).
More Information
Cost encompasses explicit costs such as payments for materials and wages, and implicit costs like the value of foregone alternatives.
Tips
Avoid confusing cost with price; cost is related to production, while price is what consumers pay.
Sources
- Economic Cost | Definition, Aspects & Examples - study.com
- What is Cost? Meaning, Definition, Detailed Explanation - BYJU'S - byjus.com
- Cost vs. Price: What's the Difference? - Investopedia - investopedia.com
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