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At an output of 10,000 units per year, a firm's total variable costs are $50,000 and its average fixed costs are $2. The total costs per year for the firm are.
If the cost function is differentiable joining, the marginal cost is the cost of the next unit produced referring to the basic volume. If the cost function is not differentiable, the marginal cost can be expressed as follows.hus the costs of producing the marginal unit of output has two components: the cost associated with producing the marginal unit and the increase in average costs for all units produced due to the âdamageâ to the entire productive process (âAC/âq)q.