Final answer:
The marginal cost of digital goods is typically a. zero as additional units can be produced with negligible costs. High fixed costs might initially reflect a steep total cost curve that flattens out due to low variable costs.
Step-by-step explanation:
The marginal cost of digital goods is typically considered to be zero. Marginal cost is defined as the cost of producing one additional unit of a product. Since digital goods do not require physical materials to create additional units, the cost is not influenced by the production volume. The marginal cost for digital products remains low or negligible regardless of the amount produced. For instance, once an e-book or a software program is developed, the cost to produce one more unit is essentially zero because it can be duplicated infinitely without incurring substantial costs.
The marginal cost of the first unit of output for any good is equivalent to the total cost. In some businesses with high fixed costs, such as a medical advice website, the total cost curve may start high but then flatline as additional services are provided at low variable costs. However, when and if the site becomes overwhelmingly popular, scaling up operations to manage increased traffic could lead to higher costs related to upgrading server space, exemplifying a scenario where fixed costs are high, but the marginal costs are low and only rise significantly under certain circumstances.