Examlex
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Production Costs
The total expenses incurred in the process of creating and manufacturing a product.
Substitution Effect
The economic principle that as the price of a good increases, consumers will replace it with cheaper alternatives, whereas if the price decreases, the good will become more preferable.
Output Effect
The effect that changes in the price level have on production due to the incentive for producers to increase supply when the price is higher.
Profit-maximizing
The method a company uses to identify the pricing and production volume that maximizes profit.
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