Assume that the fixed input for a business is rent and the variable input is labor. Marginal cost would be equal to

Question

Quizplus · Accepted Answer

Marginal cost is the increase in total cost that arises from an extra unit of production. Since labor is the variable input in this scenario, marginal cost is calculated as the change in labor costs divided by the change in output, making option D correct. Rent, being a fixed cost, does not change with the level of output and therefore does not directly affect marginal cost.

Assume That the Fixed Input for a Business Is Rent