-For the firm represented in this figure, at 100 units of output marginal cost is:
A) less than zero.
B) less than marginal revenue.
C) falling, but greater than marginal revenue.
D) greater than total cost but less than total revenue.

Question

-For the firm represented in this figure, at 100 units of output marginal cost is:
A) less than zero. 
B) less than marginal revenue. 
C) falling, but greater than marginal revenue. 
D) greater than total cost but less than total revenue.

Quizplus · Accepted Answer

Marginal cost (MC) is the additional cost incurred by producing one more unit of a good or service. It is typically compared to marginal revenue (MR), the additional revenue from selling one more unit. If MC is less than MR, it is profitable for the firm to increase production. The statement does not provide specific values for MC or MR, but if MC is less than MR at 100 units of output, it implies the firm can increase profit by producing more, making option B correct without needing a graph or specific numbers.

-For the Firm Represented in This Figure, at 100 Units