We’ve covered all sorts of concepts about firms’ costs in this chapter: opportunity costs, fixed costs, variable costs, sunk costs, marginal costs, average costs, long-run and short-run costs, economies of scale and scope, and more. That’s a lot to keep straight, but the information we have covered here is important for understanding the constraints firms face when making production decisions. This information also allows us to connect what we learned in Chapter 6, which is how a firm optimally produces a given output quantity, to many of the analyses we do in Chapter 8, Chapter 9, Chapter 10 and Chapter 11, when we look at how firms decide what output quantity to produce in the first place, or even whether to produce at all.