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The division of the total cost of production into its constituent parts, or cost of individual inputs. For example, the cost structure of the iron and steel industry would indicate absolute (or relative) amounts of expenditure on iron ore, coking coal, limestone, labour, capital equipment and so on. The cost structure thus reveals whether a particular activity is material-intensive, capital-intensive, labour-intensive, etc., with respect to expenditure on inputs. This information can provide an initial clue to the inputs likely to have the greatest bearing on the location of the activity in question. (DMS) |
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