what is meaning of marginal cost and total cost
Answers
The increase or decrease in the total cost of a production run for making one additional unit of an item. ...Marginal costs are variable costsconsisting of labor and material costs, plus an estimated portion of fixedcosts (such as administration overheads and selling expenses).
Answer:
Total Costs
Definition
Total Cost (TC) describes the total economic cost of production. It is composed of variable, and fixed, and opportunity costs.
Fixed costs
The accounting costs which do not change based on your level of output
Always determined to be fixed in the short term; if you could not change it on short notice it is fixed
EXAMPLE building costs, insurance, property taxes
Variable costs
The accounting costs that do change based on your output level
Always determined in the short run (all factors are variable in the long run); if you could change it on short notice it is variable
EXAMPLE number of widgets produced, number of low skilled employees, packaging costs
Opportunity Costs
All of the other things that you could be doing with your money if you were not doing what you are doing
Not normally accounted for in accounting costs
EXAMPLE amount of interest you would earn on an investment, salary you could earn being employed elsewhere
Formula,,,,,,,,,,,,,,,,,,,,,,,,
Total Cost = Total Fixed Cost + Total Variable Cost + Opportunity Cost
TC=TFC+TVC
Marginal Costs
Definition
Marginal cost is the change in total costs that arises when the quantity produced changes by one unit. That is, it is the cost of producing one more unit of a good. Mathematically, the marginal cost (MC) function is expressed as the first derivative of the total costs (TC) function with respect to quantity (Q). The marginal cost may change with volume, and so at each level of production, the marginal cost is the cost of the next unit produced.
Here is a a standard formulaic expression representing Total Cost:
MC = dTC / dQ