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Total, Variable, Fixed, and Marginal Cost and Output

帮考网校2020-08-06 18:41:43
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Total cost (TC) is the sum of all costs incurred in producing a certain level of output. It includes both fixed and variable costs.

Variable cost (VC) is the cost that varies with the level of output produced. Examples of variable costs include raw materials, labor, and utilities.

Fixed cost (FC) is the cost that remains constant regardless of the level of output produced. Examples of fixed costs include rent, salaries, and insurance.

Marginal cost (MC) is the cost of producing an additional unit of output. It is calculated by dividing the change in total cost by the change in output.

Output is the amount of goods or services produced by a firm in a given period of time. It is typically measured in units such as pounds, gallons, or hours.
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