COST OF PRODUCTION. In economics, the cost of pro duction is the sum-total of the labour expended and wealth con sumed in producing a commodity. The amount of money which has to be paid to call out these efforts and sacrifices is termed the expenses of production. The sum so paid, expressed per unit of output, is termed the supply price of the commodity; that is, the price which has to be paid to induce production. The term "ex penses of production" thus covers the whole of the producer's outlays and includes the producer's remuneration. Unless the pro ducer's expenses, thus defined, amount to a supply price per unit of output not higher than the effective demand price, production must either cease or be carried on at a loss.