The cost of producing one more unit of a good or service that is paid by the producer
A) is equal to the cost borne by people other than the producer.
B) has to be equal to the benefit that the consumer derives from that good.
C) is the marginal external cost.
D) is the marginal private cost.

Question

Quizplus · Accepted Answer

The cost of producing one more unit of a good or service that is paid by the producer is known as the marginal private cost. This cost includes all the expenses that the producer incurs in the production of that additional unit, such as materials, labor, and other inputs, but does not include external costs that may be borne by others.

The Cost of Producing One More Unit of a Good