Marginal cost is the opportunity cost of producing one more unit of a good or service. This means that it is the cost of producing an additional unit, and therefore, it is related to the production possibilities frontier. It is not necessarily greater than or less than marginal benefit - that depends on the specific situation.

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Marginal Cost

Question 61

Multiple Choice

Marginal cost

A) is greater then marginal benefit.
B) is the opportunity cost of producing one more unit of a good or service.
C) equals marginal benefit.
D) is less than marginal benefit.
E) is unrelated to the production possibilities frontier.

Correct Answer: