Question

The marginal cost of a good is:

a. ​decreasing whenever average total cost is decreasing.
b. ​the difference between average total cost and average variable cost.
c. ​the addition to total cost from producing one more unit of output.
d. ​always equal to average variable cost when the firm is maximizing profit.

Answer 1

In economics, marginal cost is the modification in the opportunity cost that rises when the amount produced is incremented by one unit, that is to say, it is the charge of making one more unit of a product. Instinctively, marginal cost at each level of production comprises the charge of any additional inputs essential to yield the next unit. Therefore, the answer is letter c.