Microsoft lets you have their software, Internet Explorer.By what you know about marginal cost how can they do this and stay in business?
A)They went out of business because of this.
B)The marginal cost of distributing an extra unit of software is very close to zero.
C)The marginal cost is high but they do it anyway.
D)They are covering their fixed costs.
E)They now charge for Internet Explorer.

Question

Quizplus · Accepted Answer

Marginal cost refers to the cost of producing one additional unit of a product. In the case of distributing software like Internet Explorer, the marginal cost is very low and close to zero. This is because distributing an extra unit of software does not require any significant additional resources or expenses. Therefore, Microsoft can give away Internet Explorer for free without incurring significant additional costs and still stay in business.

Microsoft Lets You Have Their Software, Internet Explorer