If a firm wishes to determine its marginal cost, it must need to know its:

Question

Quizplus · Accepted Answer

Marginal cost is the change in total cost when one additional unit of output is produced. Therefore, to determine marginal cost, only the variable cost (costs that vary with the level of production) needs to be known. Fixed costs do not affect marginal cost since they do not change when output level changes. Average revenue is also not relevant in determining marginal cost.

If a Firm Wishes to Determine Its Marginal Cost, It