Which of the following represents the marginal cost of a lemonade?
i. The opportunity cost of producing another lemonade.
II The minimum price someone is willing to pay for another lemonade.
A) I only
B) II only
C) I and II
D) Neither I nor II

Question

Quizplus · Accepted Answer

Marginal cost refers to the cost of producing one additional unit of a good or service, in this case, a lemonade. It is closely related to the opportunity cost of the resources used for the production of that additional unit, making option I correct. Option II, which refers to the minimum price someone is willing to pay, is more closely related to concepts of demand and price rather than the cost of production.

Which of the Following Represents the Marginal Cost of a Lemonade