Marginal cost equals which of the following?
(i) the average fixed cost of the current unit
(ii) the change in total costs divided by change in quantity produced
(iii) the change in variable costs divided by change in quantity produced

Question

Quizplus · Accepted Answer

Marginal cost is defined as the change in total cost divided by the change in quantity produced, which corresponds to option (ii). Option (i) is incorrect because average fixed cost is not relevant to marginal cost, which only considers changes in variable costs. Option (iii) is also incorrect because marginal cost includes changes in both variable and fixed costs, not just variable costs.

Marginal Cost Equals Which of the Following