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The increase or decrease in the total cost of a production run for making one additional unit of an item. It is computed in situations where the breakeven point has been reached: the fixed costs have already been absorbed by the already produced items and only the direct (variable) costs have to be accounted for.
Marginal costs are variable costs consisting of labor and material costs, plus an estimated portion of fixed costs (such as administration overheads and selling expenses). In companies where average costs are fairly constant, marginal cost is usually equal to average cost. However, in industries that require heavy capital investment (automobile plants, airlines, mines) and have high average costs, it is comparatively very low. The concept of marginal cost is critically important in resource allocation because, for optimum results, management must concentrate its resources where the excess of marginal revenue over the marginal cost is maximum. Also called choice cost, differential cost, or incremental cost.
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Where could one learn about marginal costs?
One is able to learn about marginal costs at several different places online, such as at the following websites: the Wikipedia Marginal Costs webpage, Marginal Cost, and Margins.
Profits will be maximized when marginal revenue?
Profits will be maximized when marginal revenue is equal to marginal costs. This will only happen in cases where there are fixed costs.
Rational decisions occur when the marginal benefits of an action equal or exceed the marginal costs?
Rational Decision making occurs when marginal benefits of an action exceed the marginal costs
A producers profits are maximized when marginal costs are?
equal to marginal revenue
How can marginal revenew and marginal costs help set the most profitable putput level?
The most profitable output level is when marginal costs equals marginal revenue. When marginal revenue is larger than marginal cost, that means that more product can be produced for more profit.
Are marginal costs relevant costs?
If marginal costs are relevant for specific situation or specific decision making scenario then marginal costs are relevant costs otherwise marginal costs can be irrelevant.
Where could one learn about marginal costs?
One is able to learn about marginal costs at several different places online, such as at the following websites: the Wikipedia Marginal Costs webpage, Marginal Cost, and Margins.
Profits will be maximized when marginal revenue?
Profits will be maximized when marginal revenue is equal to marginal costs. This will only happen in cases where there are fixed costs.
Rational decisions occur when the marginal benefits of an action equal or exceed the marginal costs?
Rational Decision making occurs when marginal benefits of an action exceed the marginal costs
A producers profits are maximized when marginal costs are?
equal to marginal revenue
A producers profits are maximized when marginal costs are .?
equal to marginal revenue
How can marginal revenew and marginal costs help set the most profitable putput level?
The most profitable output level is when marginal costs equals marginal revenue. When marginal revenue is larger than marginal cost, that means that more product can be produced for more profit.
If you have Marginal Cost and Marginal Damages how do you find the optimal level of output?
The optimal level of output is where marginal costs = marginal damages.
What Economists say that choices involves comparing?
Marginal benefits and marginal costs
Where will A profit maximizing firm produce?
Where the marginal benefits equal marginal costs.
A company is maximizing profit when marginal revenue?
A company maximizes profits when marginal revenue equals marginal costs.
When marginal costs are below average cost at a given output one can deduce that if output increases what happens?
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
