For this question,assume that the aggregate production function is represented by Y = A.Which of the following represents the marginal cost of producing an additional unit of output?
A)W
B)W / A
C)A / W
D)(1 +A)W

Question

Quizplus · Accepted Answer

The marginal cost (MC) is the additional cost incurred in producing an additional unit of output. In this case, the production function is Y = A, which implies that the output (Y) is proportional to the factor input (A). Therefore, the marginal cost of producing an additional unit of output can be calculated as follows: 
MC = Change in cost / Change in output 
Since the production function is Y = A, the change in output is equal to the change in factor input, i.e., change in A.

Now, assume that the cost of the input (A) is given by W. Then the total cost of producing output Y is W * A. So, the marginal cost can be expressed as follows: 
MC = Change in cost / Change in A 
= W / A 
Therefore, option B is the correct choice.

For This Question,assume That the Aggregate Production Function Is Represented