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Understanding Fixed, Variable and Marginal Costs in Economics

Learn more about fixed, variable and marginal costs, average cost, long term supply curve, and economic profit.

Economics
Free Course
This free online Economics course will teach you about fixed, variable and marginal costs with the help of working examples. In the course, you will examine and study the relationship between marginal cost, average total cost, and marginal revenue. ou will also study the importance of these costs in economics, learn how and why they are calculated, how we can use the results of their calculations, and a whole lot more!
  • Duration

    1-2 Hours
  • Assessment

    Yes
  • Certification

    Yes
  • Publisher

    Khan Academy

Description

Modules

Outcome

Certification

View course modules

Description

This course begins by discussing the fixed, variable, and marginal costs. You will learn that Fixed Cost is the cost that remains constant when the firm is in a short-run period. You will also learn that Total Cost is the overall cost incurred by a firm and Marginal Cost is the change in total cost divided by change in output or quantity. You will also look into Average Cost which is the per-unit cost and is calculated as total cost divided by output or quantity.

You will then look more closely into Marginal Cost which is a firm's additional cost and is calculated as a change in total cost divided by change in output or quantity. You will learn that if the marginal is less than the average, then the average declines, if the marginal is greater than the average, then the average rises, and if the marginal is equal to the average, then the average does not change. This course will also discuss the long term supply curve and economic profit.

Fixed, variable, and marginal costs are very important concepts to understand in economics. Upon the completion of this course, you will gain a better understanding of the concepts of Fixed cost, Variable cost, Marginal cost. You will also be able to visualize average cost and marginal cost as a slope as well as understand the difference between marginal revenue and marginal cost, and long term supply curve and economic profit. Sign up now and learn how to determine these key costs in economics.

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Learning Outcomes

Learning outcomes: - Explain the concepts: Fixed costs, Variable costs, Marginal costs; - Visualize average costs and marginal costs as a slope; - Compare marginal revenue and marginal costs; - Explain long term supply curve and economic profit.

Certification

All Alison courses are free to enrol, study and complete. To successfully complete this Certificate course and become an Alison Graduate, you need to achieve 80% or higher in each course assessment. Once you have completed this Certificate course, you have the option to acquire an official Certificate, which is a great way to share your achievement with the world. Your Alison Certificate is:

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An incentive for you to continue empowering yourself through lifelong learning

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