Marginal cost is the amount that
A)total cost increases when one more labourer is hired.
B)fixed cost increases when one more labourer is hired.
C)variable cost increases when one more labourer is hired.
D)total cost increases when one more unit of output is produced.
E)fixed cost increases when one more unit of output is produced.

Question

Quizplus · Accepted Answer

Marginal cost refers to the additional cost incurred when one more unit of output is produced. Therefore, option D is the correct choice. Options A and C are related to marginal cost of labor and variable cost respectively, but do not fully capture the definition of marginal cost. Options B and E are related to fixed cost, which is not affected by changes in output or labor.

Marginal Cost Is the Amount That