Production and Cost Minimizing Output Writing Assignment (Research Paper Sample)
Before answering the following questions, review the Assignment Checklist. Then, in a separate Word document, write a 1–2 page expository research paper answer the following questions based on the rule for minimizing costs of production in regard to a small business plan to minimize costs in order to increase productivity and maximize profits:
Production and Cost Minimizing Output
a. This is an explicit cost as the firm pays another organization for the use of the manufacturing equipment. It is a reported input cost of production. Moreover, payments made is evidence of cash outlay as a charge for the factors of production usage CITATION Gre14 \l 1033 (Mankiw, 2014).
b. It is an implicit cost as it implies the economic opportunity cost by the firm if it would rent out its premises for cash or profit instead of using it for personal use. Conversely, this cost is not incurred by the firm. Hence, no cash exchanges take place.
c. Wages are expenses incurred as part of the factors of production of a firm. The organization gives out cash in terms of wages to pay its workers CITATION Gre14 \l 1033 (Mankiw, 2014).
d. An implicit cost as it states the forgone cost of the owner if he/she worked somewhere else.
Pat should minimize implicit costs. These costs in
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