Set all variables to their baseline values. 9) At what level of output is average cost a minimum? 10) What is average cost (AC) at that output? 11) What is marginal cost (MC) at that output?       BASELINE COSTS TC (BASE) $175,113 AC (BASE) $43.78 MC (BASE) $64.12     NEW COSTS TC (NEW) $175,113 AC (NEW) $43.78 MC (NEW) $64.12     POLICY VARIABLES Output 4,000 Fixed cost 25,000 Tax per unit $0.00 AC(NEW)-MC(NEW) -$20.34

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Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.