What is the definition of the marginal cost of a good?
A) It is decreasing whenever average total cost is decreasing.
B) It is the addition to total cost from producing one more unit of output.
C) It is always equal to average variable cost when the firm is maximizing profit.
D) It is the difference between average total cost and average variable cost.

Question

Quizplus · Accepted Answer

The marginal cost of a good is the cost of producing one additional unit of output. Therefore, option B is the correct definition. Option A is incorrect because the decrease in average total cost does not necessarily indicate a decrease in marginal cost. Option C is incorrect because the marginal cost can be different from the average variable cost. Option D is incorrect because it defines the difference between two cost concepts, rather than the marginal cost itself.

What Is the Definition of the Marginal Cost of a Good