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# Graphical impact of cost changes on marginal and average costs

Changes in fixed costs will affect average fixed cost and average total cost, while changes in variable costs will impact average variable cost, marginal cost, and average total cost. Essentially, any change in costs can alter the financial calculations a business has to make in order to determine the most efficient way to produce and sell its products or services.

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• so changes in fixed cost will only change our average fixed cost and out average total cost.

but changes in variabel cost will change our variabel cost and our marginal cost? but does it also change total cost or average total cost?

so confused.
• Hello,

At Mr. Khan explains the upward shift of the MC curve by stating that "..as you produce more output..you are likely to incur more incremental costs". My question is: Can we assume that a pay raise () will increase output (and thus shift MC up)?
• not really, a pay rise does not increase the output, it only increases the VC (thus the AVC) and thus the MC
(1 vote)
• Will MC curve change if AVC just simply shift upward? I mean in this situation AVC difference of two quantity of output stay the same, will the MC still change?
(1 vote)
• Remember the definition of Marginal Cost: it is the cost of producing one additional unit. If the price of each unit is raised by the same amount, then marginal cost will stay the same. Think about it this way:
If MC = x - y
now MC = (x+a)-(y+a)
which equals x-y