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Write a 15 page essay on Macroeconomics: Production Costs.The term paper "Macroeconomics: Production Costs" talks about the various costs associated with the production process including the broad cat
Write a 15 page essay on Macroeconomics: Production Costs.
The term paper "Macroeconomics: Production Costs" talks about the various costs associated with the production process including the broad categories of production costs, subdivisions, as well as examples of each category and subdivision.
The production process is the beginning of a business cycle and has various effects on inputs. With consumption being the last stage in the production process, the latter increases ability of various inputs that would otherwise not be useful to satisfy the former’s wants in a number of ways. Some these ways include changing physical characteristics of inputs, changing location and time of various inputs, changing location, as well as changing the ownership of inputs from producers to consumers. Production creates various utilities that include possession, form, place, and ownership.
Costs are very vital in assisting business organizations that are engaged in the conversion of inputs to finished products to understand the profitability of a firm. Profitability of a firm is found by getting the difference between total revenue and total production costs. When the total revenues of a firm are more that the total costs then the firm is actually making profits whereas when the total revenues are less than total costs a loss arises. Therefore, it is important for the organization to understand and check on their costs keeping them far much below the total revenues to maximize the profits. So, business organizations’ microeconomic objective is to minimize costs and maximize profit.
