So, if all the activities we mentioned contribute to the final product or service, that means that virtually every department is involved â not just manufacturing or operations, but also human resources, accounting, marketing, and so on. This is the essence of Total Quality Management (TQM).
In economics, the law of increasing costs is a principle that states that once all factors of production (land, labor, capital) are at maximum output and efficiency, producing more will cost more than average. As production increases, the opportunity cost does as well. The best way to look at this is to review an example of an economy that only produces two things - cars and oranges. If all the resources of the economy are put into producing only oranges, there will not be any factors of production available to produce cars.
The Supply Curve. The first law of supply states that as the price of a product increases the quantity supplied will increase. This relationship yeilds the supply curve, a fundamental notion of economics. The concept underlying the supply curve is the increasing marginal costs faced by industries and firms.Marginal cost is the cost of an additional unit. We could also look at the average marginal cost of 10,000 additional units.he concept underlying the supply curve is the increasing marginal costs faced by industries and firms. Marginal cost is the cost of an additional unit. We could also look at the average marginal cost of 10,000 additional units.