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

Question

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

Quizplus · Accepted Answer

Marginal cost is the additional cost incurred by producing one more unit of a good or service. It is calculated as the change in total cost divided by the change in quantity produced. Since variable costs are the costs that vary with the level of output, change in variable cost divided by change in quantity produced is also an appropriate measure of marginal cost. However, the average fixed cost of the current unit does not measure the additional cost of producing one more unit and therefore is not a measure of marginal cost.

Marginal Cost Equals (I) Change in Total Cost Divided by Change