For profit maximization, the firm has to decide how much output to produce or supply along with the amount of each input needed to produce that particular level of output. 

Opportunity Cost: The best alternative that we give up when we make a choice or a decision.

Total Revenue: The amount of money a firm receives from the sale of output

The total cost increases as more labor and/or capital is used.

Marginal Revenue: The additional revenue that a firm earns when it increases production by one more unit

Once the increase in total revenue and total cost from an extra unit produced are equal, the firm can no longer increase its profit.

Explicit Costs :Costs that are direct expenditures or the price paid plainly for a project.

Implicit Costs :Costs a firm incurs when it gives up the next best alternative action or project.

An accountant looks at monetary revenues and explicit monetary outlays and calculates profit according to the generally accepted principles of accounting. That is, the difference between total revenue and accounting costs—explicit or out-of-pocket costs. The profit that is calculated by an accountant is named the
accounting profit.

For an economist, profit is the difference between total revenue and total cost or more explicitly total economic cost, which includes not only the accounting or explicit cost but also the opportunity cost of all factors
of production. 

The objective of a firm that produces a good or service is to maximize its profit, which is the difference between total revenue and total cost.

The Short Run: A time frame in which certain inputs cannot be changed.

The Long Run:A time frame in which a firm can adjust the usage of all resources if it deems necessary.

A time frame in which certain inputs cannot be changed is called the short run. These inputs are fixed in the short run and therefore called fixed inputs

The firm, can change certain inputs rather quickly—in the short run and these inputs are called variable inputs.

Total Product of Labor:The amount of maximum output that a firm can produce
with different levels of labor for a given capital amount used.

Marginal Product of Labor (MPL) :The additional output produced when a small
amount of additional labor is employed with all other inputs remaining the same.

Law of Diminishing Returns :Decrease in the marginal product of a variable input. When additional units of a variable input—typically labor—are added to fixed input—typically capital— the marginal product of variable input firstly increases and then finally decreases.

1.Total Cost

2.Fixed Costs

3.Variable Costs

4.Average Costs

In the shortrun, capital is fixed and the firm can only increase labor to increase production but diminishing returns sets in eventually as discussed earlier. However, in the long run, the firm can change the amount of capital it uses as well. When more capital is used for a given amount of labor employed, output will increase. 

Constant Returns to Scale: An increase in output by the same percentage as an increase in all inputs.