Solve Question 12 12) Referring to question # 1, what is the Marginal Cost to produce 1 more unit?

Answered: 12) Referring to question # 1, what is…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 22RQ: What are diminishing marginal returns as they relate to costs?

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Solve Question 12

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12.

The cost of production is the summation of all the costs incurred while producing the commodity or service by the producer. The cost includes the fixed cost as well as the variable cost. The fixed cost is the cost that remains the same at all levels of output even at the zero levels. The variable cost occurs only when the production takes place. Thus, the total cost at zero levels would be the fixed cost, and the difference between the total cost at zero units and 1 unit will be the variable cost.

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