Describe what fixed costs and marginal costs mean to a company (is this correct?

Question

Describe what fixed costs and marginal costs mean to a company (is this correct? And if so, why?)

Describe what fixed costs and marginal costs mean to a company Choose the correct answer below. A. Fixed cost is the rate of change of cost C(x) at the level of production x and is equal to the slope of the cost function at x. Marginal cost is the constant for a particular product and does not change as more items are made. O B. The number of units at which revenue just equals cost is the fixed cost. Marginal cost is the constant for a particular product and does not change as more items are made. C. Fixed cost is the constant for a particular product and does not change as more items are made. Marginal cost is the rate of change of cost C(x) at the level of production x and is equal to the slope of the cost function at x. O D. Fixed cost is the constant for a particular product and does not change as more items are made. The number of units at which revenue just equals cost is the miarginalaost.

Explanation / Answer

Fixed cost is a constant amount which doesn't change with the number of units produced.

Whereas, Marginal cost = Change in total cost by producing one extra unit.

OPTION C

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