The cost a firm incurs to create its output for the market is referred to as total cost in the production theory. Generally speaking, it is defined as the sum of all overall costs, both fixed and variable.
The additional costs spent by manufacturing more units of an item or service are known as marginal costs. By dividing the overall change in the cost of manufacturing additional items by the change in the quantity of goods produced, it is determined.
What formula is used to determine marginal cost of production?
It is derived from both fixed costs for goods that have already been produced and variable costs that still need to be taken into account. It is computed by dividing the change in costs by the change in quantity. All costs that vary with that amount of production are included in the marginal cost of production.
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