Costs of Production. Chapter 20. Economic Costs. Economic costs are the costs faced when deciding how to use resources They can be obvious costs like wages or rents – explicit costs Or hidden – such as interest income lost when money from savings is used – implicit costs. Profits.
Q of labor
Q of output
Dashed lines tell you where a firm needs to move to a new plant size.
At this point, a new larger plant can produce at lower ATC than the existing plant
Average Total Costs