Money Cost: When production cost is expressed in terms of monetary units, it is called money cost. It means the aggregate money expenditure incurred by a producer on the purchase, procurement and processing of inputs. Real Cost: Alfred Marshall calls real cost of production as a ‘social cost’. Real cost refers to the payments made to the factors of production to compensate for disutility’s of rendering their services. It is computed in terms of the toil, trouble, pain and discomfort involved for labour, when it is engaged in production.

The interest that could be earned if the amount invested in a business or security was instead invested in government bonds or in time deposits.

Hie Uma, **Definition of Money Cost :-** The interest that could be earned if the amount invested in a business or security was instead invested in government bonds or in time deposits. **Definition of Real Cost :-** The overall actual expense involved in creating a good or service for sale to consumers. The real cost of production for a business typically includes the value of all tangible resources such as raw materials and labor that are used in the production process.

**MONEY COST AND REAL COST** hi, Money cost is the term used when production cost is expressed in terms of monetary units. It means the total expenses that the producer has incurred on purchase procurement and processing of inputs. The payments made to the factors of production to compensate for incompetency of rendering their services is called real cost. Real cost is computed in terms of the toil, trouble, pain and discomfort involved for labour, when it is engaged in production. Thanks

REAL COST : The overall actual expense involved in creating a good or service for sale to consumers. The real cost of production for a business typically includes the value of all tangible resources such as raw materials and labor that are used in the production process. MONEY COST : When production cost is expressed in terms of monetary units, it is called money cost. It means the aggregate money expenditure incurred by a producer on the purchase, procurement and processing of inputs.

Hiiii friend.... Money Cost ---------- The amount of payment paid to the Factors of Production in terms of current monetary units is known as money cost. Real Cost --------- The amount of payment paid to the Factors of production in terms of amount of Product is known as Real cost. Regards,