Marginal Cost Is Equal to

question 80

Multiple Choice

Marginal cost is equal to

• A)The change in total costs divided by the change in quantity produced.
• B)The change in fixed costs as more units are produced.
• C)Total cost divided by quantity produced.
• D)Average total cost multiplied by quantity produced.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, remaining constant regardless of business activity levels.

Variable Costs

Costs that vary directly with the level of production or the volume of services provided.

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business, such as costs for raw materials or production supplies.

Break-even Point

The production level or sales volume at which total revenues equal total costs, resulting in no profit or loss.