Question

Recall that the marginal cost function is the derivative of the cost function. If a given cost function represents the cost in dollars of producing amounts of a drug, measured in milligrams, what are the units of the marginal cost function?

Answer 1

The units of the marginal cost function are dollars per unit of output.

Step-by-step explanation:

The units of the marginal cost function are dollars per unit of output.

Marginal cost is the additional cost of producing one more unit of output. So, for example, if the cost function tells us that producing 100 milligrams of a drug costs $200, and producing 101 milligrams costs $205, then the marginal cost of producing one more milligram is $5.

The marginal cost function gives us the rate at which the cost is changing with respect to the amount of output produced.