Marginal cost is defined as the
A) cost of an additional unit of a variable factor of production.
B) change in fixed cost resulting from an additional unit of output.
C) cost per unit when the firm is operating at capacity.
D) difference between average total cost and average variable cost.
E) change in total cost resulting from an additional unit of output.

Question

Quizplus · Accepted Answer

Marginal cost is the change in total cost resulting from the production of one additional unit. This means it includes both variable and fixed costs, but only considers the additional cost incurred by producing another unit. Therefore, out of the given choices, the best option is E.

Marginal Cost Is Defined as the