An example of a firm's marginal private cost is:
A) noise pollution generated by the production process.
B) wages paid to employees.
C) government regulations.
D) vaccinations.

Question

Quizplus · Accepted Answer

Marginal private cost refers to the cost that a firm incurs for producing one additional unit of a good or service. Wages paid to employees for producing that additional unit are a direct cost to the firm, making it a marginal private cost. Noise pollution is an external cost, government regulations are external constraints, and vaccinations are unrelated to the production process's marginal costs.

An Example of a Firm's Marginal Private Cost Is