Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
when marginal costs are below average cost at a given output, one candeduce that, if output increases dose average costs fall or marginal costs will fall
No these are costs such as rent stay basically same irrespective of output
It depends if the increase in Average Cost is caused by an increase in Fixed Costs or an increase in Variable Costs. An increase in Fixed Costs will not increase MC, because FCs do not vary with output (by definition) And increase in Variable Costs will increase MC
Fixed costs do not affect short-run marginal cost because they are just that- fixed. They are not dependent on quantity when it changes and does not vary directly with the level of output. Variable costs, however, do affect short-run marginal costs.
Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
Variable costs vary depending on a company's production. Production, or output, and costs are included in variable costs. Production and costs are directly related.
Vary per unit of output as production volume changes.
1. Fixed costs. These types of costs do not vary with output in the short term. An example might be rent costs for premises. 2. Variable costs. These are costs that vary directly with output and will be business specific. A manufacturing industry making plastic widgets will see the cost of their plastic raw material vary directly with production. 3. Semi-variable costs, or 'stepped' costs. These are costs fixed over a small range of output but variable over a longer range of output particularly at certain critical levels. They may 'step-up' as with utility bills or 'step-down' as with quantity discounts. Please note that all costs are variable costs if you take a long enough time frame.
when marginal costs are below average cost at a given output, one candeduce that, if output increases dose average costs fall or marginal costs will fall
No these are costs such as rent stay basically same irrespective of output
It depends if the increase in Average Cost is caused by an increase in Fixed Costs or an increase in Variable Costs. An increase in Fixed Costs will not increase MC, because FCs do not vary with output (by definition) And increase in Variable Costs will increase MC
For a given configuration of plant and equipment, short-run costs vary as output varies. The firm can incur long-run costs to change that configuration. This pair of terms is the economist's analogy of the accounting pair, above, variable and fixed costs
Fixed costs do not affect short-run marginal cost because they are just that- fixed. They are not dependent on quantity when it changes and does not vary directly with the level of output. Variable costs, however, do affect short-run marginal costs.
The answer will depend of where in the world you are: labour and material costs vary enormously.The answer will depend of where in the world you are: labour and material costs vary enormously.The answer will depend of where in the world you are: labour and material costs vary enormously.The answer will depend of where in the world you are: labour and material costs vary enormously.
because it does
Those are Fixed Cost - costs which must be paid for any output level (sunk costs)