Complete the following sentence.Marginal cost is
A)the total cost of an activity.
B)the total cost of a decrease in an activity.
C)the opportunity cost of an increase in an activity.
D)the opportunity cost of a decrease in an activity.
E)equal to marginal benefit.

Question

Quizplus · Accepted Answer

Marginal cost refers to the additional cost incurred in producing one more unit of a good or service. It is specifically the cost of the last unit produced. Therefore, it is not the total cost of an activity (A) or the total cost of a decrease in an activity (B). It is also not the opportunity cost of a decrease in an activity (D) because opportunity cost refers to the value of the next best alternative foregone. Marginal cost only considers the cost of producing one more unit, not the cost of producing one less unit. Finally, marginal cost is not necessarily equal to marginal benefit (E) as it depends on the specific context and circumstances.

Complete the Following Sentence.Marginal Cost Is