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CronoDAS comments on Why economics is not a morality tale - Less Wrong Discussion
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Sorry. In the context of microeconomics, "cost" usually means "opportunity cost" and I didn't realize I needed to say this explicitly. Dollar costs are usually a pretty good proxy for opportunity costs in many cases, though...
If cost includes opportunity cost, your entire second paragraph ceases to be meaningful, because the cost would necessarily include the opportunity cost of not having priced the good higher and made higher profits. Using opportunity cost as your cost means this kind of underproduction is impossible; your marginal cost is whatever cost would result in the maximum profits.