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mar2-cost-production.md

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# March 2 - Cost of Production

## Fixed vs Variable Cost

- Fixed Costs always have to be payed
- Yearly salary

- Variable cost changes
- Hourly paycheck rate

- Total Cost -- fixed plus variable cost
- Cost minimization -- the combination of spending that costs the least
- Marginal cost -- cost of doing something again
- marginal costs total minus output

## Profit Maximizing

- Output that gives as much profit as possible
- Marginal revenue -- additional revenue of another unit of output
- When should a company go out of Business?

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