Economic cost is the combination of losses of any goods that have a value attached to them by any one individual.[1][2] Economic cost is used mainly by economists as means to compare the prudence of one course of action with that of another. The factors to be taken into consideration are money, time, and other resources cost is the sum of explicit cost.[3]

The comparison includes the gains and losses precluded by taking a course of action as well as those of the course taken itself. Economic cost differs from accounting cost because it includes opportunity cost.[4][2][5] (Some sources refer to accounting cost as explicit cost and opportunity cost as implicit cost.[2][5])

Aspects of economic costs

Shows a firm's Economic Costs in the "Short Run" - which, as defined, contains at least 1 "Fixed Cost" that cannot be changed or done away with even if the firm goes out of business (stops producing)
Shows a firm's Economic Costs in the "Short Run" - which, as defined, contains at least 1 "Fixed Cost" that cannot be changed or done away with even if the firm goes out of business (stops producing)

References

  1. ^ Phillips, Ulrich B. (1905). "The Economic Cost of Slaveholding in the Cotton Belt". Political Science Quarterly. 20 (2): 257–275. doi:10.2307/2140400. hdl:2027/hvd.32044082042185. ISSN 0032-3195. JSTOR 2140400.
  2. ^ a b c "What is economic cost? Definition, comparisons, and examples". Market Business News. Retrieved 2019-07-16.
  3. ^ "economic cost". Cambridge Dictionary of Business English. Cambridge University Press. Retrieved 2019-07-16.
  4. ^ "Economic Cost: Definition, Function & Quiz". study.com. Retrieved 11 April 2015.
  5. ^ a b Leonard, Kimberlee (2019-01-31). "The DiffereBetween Accounting Costs & Economic Costs". Chron. Retrieved 2019-07-17.
  6. ^ a b "Variable Costing Formula (Examples) | How to Calculate Variable Costing?". 2019-01-10. Retrieved 2019-07-07.
  7. ^ "Costs of production: fixed and variable | Economics Online". www.economicsonline.co.uk. Retrieved 2019-10-04.
  8. ^ a b c Be able to explain and calculate average and marginal cost to make production decisions.
  9. ^ Eiteman, Wilford J.; Guthrie, Glenn E. (1952). "The Shape of the Average Cost Curve". The American Economic Review. 42 (5): 832–838. ISSN 0002-8282. JSTOR 1812530.
  10. ^ Beggs, Jodi. "Cost Curves Associated With Costs of Production". ThoughtCo. Retrieved 2019-07-16.