Refer to Figure 3.1.If one of the graphs represents the total cost of an activity,which other graph best represents the marginal cost of the activity?
A) A
B) B
C) C
D) D

Question

Refer to Figure 3.1.If one of the graphs represents the total cost of an activity,which other graph best represents the marginal cost of the activity? 
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

The marginal cost curve is the derivative of the total cost curve. In graph B, the slope (i.e. derivative) of the curve is steepest at point Q, which indicates the point of diminishing returns and the marginal cost curve reaches its minimum at that point. Hence, graph B best represents the marginal cost of the activity.