Production costs refer to the expenses incurred by firms during the process of producing goods or services. These costs include expenses related to labor, raw materials, equipment, rent, utilities, etc.
Related terms
Fixed Costs: Costs that do not change regardless of how much output is produced (e.g., rent).
Variable Costs: Costs that change with the level of output produced (e.g., raw material expenses).
Marginal Cost: The additional cost incurred by producing one more unit of output.