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Are marginal costs fixed or variable costs? Marginal costs are a function of both fixed and variable costs. Fixed costs of production are considered the costs that occur on a regular basis such as rent or employees' salaries. By contrast, a variable cost is one that changes based on output and production costs. For example, a country club with a swimming pool may spend more money on chlorine in the summer months. Marginal costs are defined as the overall change in price when a buyer increases the amount purchased by one unit.
Assume a computer firmâs marginal costs of production are constant at $1,000 per. computer. However, the fixed costs of production are equal to $10,000. a. Calculate the firmâs average variable cost and average total cost curves. The variable cost of producing an additional unit, marginal cost, is constant at $1,000, so VC =$1000Q, andAVC =.