Sign-up today to join over 5 million learners already on ALISON:

Understanding Fixed, Variable and Marginal Costs in Economics


Understanding Fixed, Variable and Marginal Costs in Economics
Understanding Fixed, Variable and Marginal Costs in Economics

Learn more about fixed, variable and marginal costs.


Join 1,798 other students.
Understanding Fixed, Variable and Marginal Costs in Economics Course
4 26

Course Description

Fixed cost, variable cost and marginal cost are very important concepts to understand in economics. Fixed costs are business expenses and are often time-related such as salaries and rents which are paid on a monthly basis. Variable costs are expenses related to business activity and change in proportion to an increase or decrease in this activity. Marginal cost is the change in total cost that arises when the quantity of goods produced increases by one unit. It is a measure of the cost of producing one additional unit. This free online economics course explains in a simple and clear manner the concepts behind fixed, variable and marginal costs using worked examples. The relationship between marginal cost, average total cost and marginal revenue is also outlined. By studying this course the learner will appreciate the importance of these costs in economics, and why and how they are calculated. This free online economics course will be of great interest to all professionals in economics, finance and business who would like a greater knowledge and understanding of fixed, variable and marginal costs, and to all learners who would like a greater insight into the factors that determine these key costs in economics.

Certification

To qualify for your official ALISON Diploma, Certificate or PDF you must study and complete all modules and score 80% or more in each of the course assessments. A link to your Diploma certificate will then appear under the My Certificates heading of your My Account page.

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;


Manage a Group of Learners

Share This Course!

 
Course Rating (By Learners): 4 stars based on 26 reviews
Course Title: Understanding Fixed, Variable and Marginal Costs in Economics
Course #: 576
Course Publisher: Khan Academy
Course Category: 2
Content Origin:
Course Description: Fixed cost, variable cost and marginal cost are very important concepts to understand in economics. Fixed costs are business expenses and are often time-related such as salaries and rents which are paid on a monthly basis. Variable costs are expenses related to business activity and change in proportion to an increase or decrease in this activity. Marginal cost is the change in total cost that arises when the quantity of goods produced increases by one unit. It is a measure of the cost of producing one additional unit. This free online economics course explains in a simple and clear manner the concepts behind fixed, variable and marginal costs using worked examples. The relationship between marginal cost, average total cost and marginal revenue is also outlined. By studying this course the learner will appreciate the importance of these costs in economics, and why and how they are calculated. This free online economics course will be of great interest to all professionals in economics, finance and business who would like a greater knowledge and understanding of fixed, variable and marginal costs, and to all learners who would like a greater insight into the factors that determine these key costs in economics.
License: This course is available from Khan Academy OpenCourseWare through the following Creative Commons licence:
Creative Commons License
Release Date: 14 December 2012
Content  
Course Duration (Avg Learner): 1-2 Hours
Video/Audio: High
Audio Only: High
Animation: None
Assessments: Yes
Education Level
Age appropriateness: 18+ Years
Minimum Grade/Class Level: Post-Secondary
Validation: Level 5
ALISON Testing: Yes
Certification Availability
PDF Download: Yes
Parchment: Yes
Framed Certification: Yes

Study for Free at Your Own Pace! Start This Course

  • Vaiolelai Niu
    Vaiolelai Niu New Zealand This course is very useful for any business owner and I highly recommend it. 2015-01-28 13:01:30
  • Vaiolelai Niu
    Vaiolelai Niu New Zealand Fixed costs are business expenses such as rent, advertising, insurance and office supplies, which tend to remain the same regardless of production output. The variable costs vary depending on a company's production volume; they rise as production increases and fall as production decreases. They are critical costs that any business need in order to operate efficiently and stay competitive in a long term. Marginal cost is the change in the total cost that arises when the quantity produced has an increment by unit. That is, it is the cost of producing one more unit of a good. 2015-01-28 12:01:48
  • Faig Kerimov
    Faig Kerimov Azerbaijan Very interesting course. I 've learnt a lot of things.Thank you. 2014-10-24 13:10:38
  • Telmo Guevara
    Telmo Guevara Ecuador Well presented lectures, it might help to have some assignments or exercises performed to better understand material presented 2014-09-24 02:09:47
  • Cynthia Prentice
    Cynthia Prentice United States of America It was a very informative course. It will definitely help me understand the information I am learning at my university. 2014-09-19 11:09:24
  • Ahmad Abdelqader
    Ahmad Abdelqader Jordan Course Module: Module 1: Understanding Fixed, Variable and Marginal Costs in Economics Course Topic: Long Term Supply Curve and Economic Profit Comment: This subject is very helpful.. 2013-07-02 10:07:45
  • Hafez Qubbaj
    Hafez Qubbaj Kuwait Course Module: Module 1: Understanding Fixed, Variable and Marginal Costs in Economics
    Course Topic: Introducing Fixed, Variable, and Marginal Costs
    Comment: I FOUND IT USEFUL 2012-12-29 06:12:21
  • Sri Laxmi
    Sri Laxmi India Course Module: Module 1: Understanding Fixed, Variable and Marginal Costs in Economics
    Course Topic: Introducing Fixed, Variable, and Marginal Costs
    Comment: This subject is very helpful... 2012-12-16 12:12:34
More Comments and Reviews >>

Study for Free at Your Own Pace! Start This Course

Free, Online Understanding Fixed, Variable and Marginal Costs in Economics Course.