Marginal and Average Costs

Two other costs that we need to consider are marginal and average costs. Average costs are quite easy to understand. To work out the average cost for the firm we have to take the total costs and divide that by the units we have produced. For the example of the dress firm then: Total costs… Continue reading Marginal and Average Costs

Fixed and Variable Costs

All costs firms fall into one of two categories. They will be fixed costs which are costs that don’t vary with output. Or they will be variable costs which do vary with output. If we took the example of a firm making dresses a fixed cost could be a dress factory. The cost of this… Continue reading Fixed and Variable Costs