ECONOMICS

Detailed explanation-1: -The total cost of a business is composed of fixed costs and variable costs. Fixed costs and variable costs affect the marginal cost of production only if variable costs exist. The marginal cost of production is calculated by dividing the change in the total cost by a one-unit change in the production output level.

Detailed explanation-2: -To calculate total cost, you simply take the sum of all marginal cost at each output level up to the point you you are looking and add it to fixed cost. This works because the sum of marginal cost up to an output level is equal to variable costs and when added to fixed cost, we get total costs.

Detailed explanation-3: -Marginal costs are a function of the total cost of production, which includes fixed and variable costs. Fixed costs of production are constant, occur regularly, and do not change in the short-term with changes in production.

Detailed explanation-4: -Total Costs = Total Fixed Costs + Total Variable Costs Next, the change in total costs and change in quantity (i.e. production volume) must be tracked across a specified period. The final step is to calculate the marginal cost by dividing the change in total costs by the change in quantity.

Detailed explanation-5: -In economics, the marginal cost is the change in total production cost that comes from making or producing one additional unit. To calculate marginal cost, divide the change in production costs by the change in quantity.