Final answer:
The association of production costs with the units produced is known as assignment. It reflects the method a firm uses to apply costs to each unit of output, in relation to the combination of labor, physical capital, and technology that comprises a production technology.
Step-by-step explanation:
The association of production costs with the units produced is referred to as C. assignment. Costs in the long run are associated with the production technology a firm uses, which includes a combination of labor, physical capital, and technology. These factors come together to form the method of production.
Each input like labor comes with a factor payment, like wages, that contributes to the overall cost of production. Furthermore, the production costs per unit can involve fixed costs, average cost, average variable cost, variable costs, and marginal cost.
Understanding the correlation between output and production costs is crucial for a firm to determine its optimal scale of production. When a firm experiences economies of scale, the cost per unit decreases as the quantity of output increases, which is favorable for businesses as they grow and optimize their production technology.
Therefore, the correct answar is C. assignment.