True or false: it doesn’t matter whether you compute marginal cost using total cost or variable cost.

1 answer:

8 0

It is TRUE. Marginal cost is the amount added when there is an additional unit of product or service produced. Meanwhile, the total cost, as defined in accounting, is composed of the total fixed costs and its total variable costs. Fixed cost is not affected by the number of output a company produced. Thus it won’t affect the marginal cost.

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