Roberts Electronics calculates that if it produces 15 radar detectors, its costs are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this instance, $90 is the firm's ____ cost.
A)average
B)fixed
C)variable
D)marginal
E)average variable

Question

Quizplus · Accepted Answer

The marginal cost is the additional cost incurred by producing one more unit of a good. Here, the cost increases by $90 when one additional radar detector is produced, making $90 the marginal cost.

Roberts Electronics Calculates That If It Produces 15 Radar Detectors