Question

Which costs are measured on per-unit basis: fixed costs, average cost, average variable cost, variable costs,

and marginal cost?

Short answer

On a per unit basis, marginal cost, average cost, and average variable cost are calculated.

Step-by-step solution

Step 1. Introduction

Fixed Cost: A cost that remains constant regardless of output volume.

For instance, rent and insurance premiums.

The term"marginal cost" refers to a cost that is distinct from both the average total cost and the average variable cost. It is the cost of creating an additional unit of production. As a result, it is simply the cost per unit of the next item being produced, not the cost per unit of all units being produced (or next few).

The average total cost (also known as the average cost) is computed by dividing the total cost by the output amount.

The average variable cost, also known as the variable cost average, is computed by divides the variable cost by the output amount.

Step 2. Explanation

Fixed Cost: A cost that remains constant regardless of output volume.

For instance, rent and insurance premiums.

The term "marginal cost" refers to a cost that is distinct from both the average total cost and the average variable cost. It is the cost of creating an additional unit of production. As a result, it is simply the cost per unit of the next item being produced, not the cost per unit of all units being produced (or next few).

The average total cost (also known as the average cost) is computed by dividing the total cost by the output amount.

The average variable cost, also known as the variable cost average, is computed by divides the variable cost by the output amount.