Marginal cost always reflects the cost of variable factors.

Name: Marginal cost always reflects the cost of variable factors.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Marginal cost is the cost incurred by producing one additional unit of output. Since this involves adding more of the variable factors (e.g. labor, raw materials), the marginal cost reflects the cost of those variable factors. Therefore, the statement is true.

Marginal Cost Always Reflects the Cost of Variable Factors