Marginal costs exist because:
A)the decision to produce more of some product means the sacrifice of other products.
B)wants are scarce relative to resources.
C)households and businesses make rational decisions.
D)most decisions do not involve sacrifices or tradeoffs.

Question

Quizplus · Accepted Answer

Marginal costs exist because producing more of a certain product requires sacrificing the production of other products, meaning there is an opportunity cost associated with the decision. Marginal costs reflect the additional cost incurred by producing one more unit of a product, and this cost increases as more units are produced due to the scarcity of resources. Choices B, C, and D are not directly related to the existence of marginal costs.

Marginal Costs Exist Because