The costs of production

This chapter discusses the major motivating force behind all market-based economic behavior: profits. The economic concept of opportunity cost is highlighted, with examples of the next best alternative in professional and personal decision-making. A clear distinction between accounting profits and economic profits is described and explained. Special attention is given to cost relationships, including constant, decreasing, and increasing cost curves, and how they relate to production in real-world examples such as Walmart, feedlots, forestry, and meatpacking plants.