Marginal cost equals
A) total cost minus total variable cost.
B) total fixed cost divided by total output.
C) total variable cost divided by total output.
D) the change in total cost that results from a one-unit increase in output.
E) the change in fixed cost that results from a one-unit increase in output.

Question

Quizplus · Accepted Answer

Marginal cost is the cost of producing one additional unit of output. Therefore, it is calculated as the change in total cost that results from a one-unit increase in output. Choice D is the correct answer. A, B, and C are not correct because they do not take into account the change in cost per unit with additional output. E is not correct because marginal cost is concerned with changes in total cost, not just fixed cost.

Marginal Cost Equals