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Simplify. Assume that all variables represent positive real numbers.
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Inputs
The resources (such as labor, capital, materials, and energy) used in the production process to produce goods and services.
Marginal Product
The increase in output that results from employing one more unit of a factor of production, holding all other factors constant.
Labor Costs
The total expenses incurred by companies for the payment of wages, benefits, and taxes associated with the employment of labor.
Capital Costs
Expenditures for acquiring fixed assets such as buildings, machinery, and equipment, or the costs associated with improving existing assets.
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