A company could produce 100 units of a good for $320 or produce 101 units of the same good for
$324. The $4 difference in costs is
A) the marginal cost of producing the 101st unit.
B) the marginal benefit of producing the 101st unit.
C) both the marginal benefit and the marginal cost of producing the 101st unit.
D) neither the marginal benefit nor the marginal cost of producing the 101st unit.

Question

Quizplus · Accepted Answer

The $4 difference in costs represents the additional cost incurred to produce one more unit (from 100 to 101 units), which is the definition of marginal cost.

A Company Could Produce 100 Units of a Good for $320