WILL A CHANGE IN FIXED COSTS LEAD TO A CHANGE IN MARGINAL COSTS?

Change in fixed costs has no impact on the marginal cost because fixed costs are time-related and not output-related.

In other words, fixed cost does not affect the marginal cost because they are costs that do not vary with output.

Also, as marginal cost is the additional cost of producing the additional unit, it, therefore, follows that marginal cost is only affected by variable costs, not fixed costs.

Secondly, we can also use functions to illustrate mathematically why fixed costs do not affect marginal costs.

$C(q)=4q^2+3q+6$

Recall that marginal cost is the first derivative of the total cost.

Also, recall that total cost is the sum of variable and fixed costs. 6 in the above function represents fixed cost because it is a constant.

Taking the derivative, and also remembering that the derivative of a constant is zero we have:

$C'(q)=8q+3$.

Thus, it is clear that fixed costs are unrelated to marginal costs.

To summarize, fixed costs do not affect marginal costs because they are not related to output.

Only changes in variable costs will affect marginal cost.

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