Conrad is, as you know, thinking about expansion, and this chapter will help him understand the costs involved. It is important to distinguish between the short and long run, and the concept of marginal costs is central. The exercises give you practice in deriving and interpreting cost functions under different assumptions about factor costs, production technology, and time perspective. We will visit many companies, a seamstress in Dar es Salaam, the startup Alpha Tech, the Leontief brothers (again), and a cardboard manufacturer considering investing in green technology.