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Unformatted text preview: The fourth column of Table 1 reports the variable cost that the firm incurs from hiring 1 to 6 workers at $20 each, while the fifth column reports the fixed cost of the single unit of capital that the firm employs. The fixed cost of $100 is the sameno matter how many units of output the firm produces. Total and marginal costs. The firm's total cost of production is the sum of all its variable and fixed costs. The firm's marginal cost is the per unit change in total cost that results from a change in total product. The concepts of total and marginal cost are illustrated in Table 1 . The sixth column of this table reports the firm's total costs, which are simply the sum of its variable and fixed costs. The seventh column reports the marginal cost associated with different levels of output. For example, when the firm increases its total product from 0 to 5 units of output, the change in the...
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- Fall '10