Question

According to Marshall, what is meant by "real cost"?

Options

• Money paid for wages and rent

• All efforts and sacrifices made by the producer in production

• Only the money spent on raw materials

• The fixed monthly rent paid by a firm

Answer 1

All efforts and sacrifices made by the producer in production

Explanation: 

Real cost includes the effort, labour, and sacrifices, which is broader than just monetary expenses.