Marginal Cost changes due to change in ______Cost
a)Variable
b)Fixed
c)Total
d)Average
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(a) Variable cost
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Answer:
(a) Marginal Cost changes due to change in Variable Cost.
Explanation:
- The change in overall cost as a result of a change in production is measured by marginal cost.
- When there are variable costs involved with the production, the marginal cost of production is altered.
- A variable cost is determined by the number of goods and services produced. Unlike a fixed cost, it is always changing. With the cost increasing as the production level increases and lowering as it decreases.
- Consider a toy manufacturing plant. As the level of toy manufacturing output varies, so does the electrical bill. If no toys are made, the company saves money on its electrical cost.The cost of electricity rises in tandem with the increase in toy manufacturing output .
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