Final answer:
Fixed cost is the cost that does not change with production, total cost includes both fixed and variable costs, and marginal cost is the cost of producing an additional unit.
Step-by-step explanation:
The student has asked about the concepts of fixed cost, total cost, and marginal cost in the context of production and economics. Let's address each one separately:
Fixed Cost: This is the cost that remains constant regardless of the level of production. Whether a firm produces one unit or a thousand, these costs, such as rent, salaries, and insurance, do not change. They are also considered sunk costs, meaning they have already been incurred and cannot be recovered.
Total Cost: Total cost is the sum of fixed costs and variable costs associated with production. As production increases, total cost increases with the addition of variable costs, which are costs that vary with production, such as materials and labor.
Marginal Cost: Marginal cost is the additional cost incurred for producing one more unit of output. It changes with the level of production, and typically, the marginal cost increases as production increases due to diminishing marginal returns.
In summary, fixed cost is constant, the total cost is the aggregate of fixed and variable costs, and the marginal cost reflects the cost of incremental production.