Marginal cost
A)is always less than price.
B)can be negative.
C)is the minimum price a producer must receive to induce him to offer one more unit of a good or service for sale.
D)is greater than price.
E)decreases as more of a good or service is produced.

Question

Quizplus · Accepted Answer

Marginal cost is the additional cost incurred to produce one more unit of a good or service. It is the minimum price a producer must receive to induce him to offer one more unit of a good or service for sale. Therefore, option C is the correct answer. Marginal cost can be equal to or greater than the price depending on the market conditions, but it cannot be always less than price. Marginal cost can never be negative as it represents the additional cost of producing one more unit. Lastly, marginal cost may increase or decrease as more of a good or service is produced, depending on economies of scale, which can influence the cost of production.

Marginal Cost