Costs of production
What Costs of production means in Economics A-Level, as defined for AQA.
Definitions of Costs of production
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Reference: AQA
Economy-wide costs whose changes shift the short-run aggregate supply curve, including money wage rates, raw material prices, business taxes, and exchange rates affecting imported costs.
What determines short-run aggregate supply in the immediate term, such as wage rates, raw material prices and business taxes.
The expenses a firm faces, which the physical relationships between inputs and outputs directly determine.
Topics that use Costs of production
- Aggregate demand and aggregate supply analysis (AQA A-Level)
- The law of diminishing returns and returns to scale (AQA A-Level)
Related terms
- Factors of production
- Aggregate demand
- Aggregate demand components
- Aggregate supply
- Capacity constraints
- Demand-deficient (cyclical) unemployment
- Diminishing marginal returns
- Economic shocks
Using Costs of production in the exam
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