Which of the following statements is (are) TRUE?
I. MC = ΔTC/ΔQ
II. MC = ΔVC/ΔQ
III. Marginal cost falls as returns to labor begin to diminish.
A) I, II, and III
B) I and II
C) II and III
D) I and III

Question

Quizplus · Accepted Answer

I. MC = ΔTC/ΔQ is true because marginal cost is defined as the change in total cost that arises when the quantity produced changes by one unit.II. MC = ΔVC/ΔQ is also true because marginal cost can be calculated as the change in variable cost divided by the change in quantity, given that fixed costs do not change with production levels.

Which of the Following Statements Is (Are) TRUE