(Marginal Cost) What is the difference between fixed cost and variable cost? Does each type of cost affect short-run marginal cost? If yes, explain how each affects marginal cost. If no, explain why each does or does not affect marginal cost.Fixed cost is a short-run phenomenon. It does not vary as output varies, and the firm must pay fixed costs in the short run even if output is zero. Variable cost is associated with the firm’s variable resources. As output varies, usage of the variable resources varies. Thus, variable cost rises as output rises and falls as output falls. If output is zero, variable cost is zero. Because marginal cost measures the change in total cost as output changes by one unit, it is affected by variable cost only. By definition, fixed cost does not change in the short run and thus has no impact on short-run marginal cost.