Understanding cost concepts is fundamental to managerial economics and business decision-making.

Fixed Costs remain constant regardless of output level—rent, insurance, and permanent staff salaries.

Variable Costs change with production levels—raw materials, direct labor, and utilities.

Total Cost is the sum of fixed and variable costs at any output level.

Marginal Cost is the change in total cost from producing one additional unit, crucial for profit maximization decisions.

Opportunity Cost represents the value of the next best alternative foregone.

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Pricing Strategies

Optimize pricing decisions.

Demand Elasticity

Understand price sensitivity.

Demand Analysis

Analyze market demand.