ECONOMICS

Detailed explanation-1: -There is a marginal cost when there are changes in the total cost of production. Since fixed costs are constant, they do not contribute to a change in total production costs. Therefore, marginal costs exist when variable costs exist.

Detailed explanation-2: -Marginal cost is the expense incurred by a business for producing an additional unit of a good or service. It is calculated by taking the total cost of producing additional products and dividing it by the total number of extra units produced.

Detailed explanation-3: -It is calculated as Marginal cost = Direct Material + Direct Labour + Direct Expenses + Variable Overheads.

Detailed explanation-4: -’b. Costs that are small and unimportant with little impact on profits are called marginal costs. ‘ is not a true statement.