The marginal cost of action choice X:

Question

Quizplus · Accepted Answer

Marginal cost specifically refers to the additional cost incurred from a small incremental change in the level of activity or production, in this case represented by action choice X. It does not inherently decrease as X increases (this depends on the cost structure of the activity), nor does it represent sunk costs (costs already incurred), nor is it necessarily minimized at the best level of activity (the best level of activity is often where marginal cost equals marginal benefit, not where marginal cost is minimized).

The Marginal Cost of Action Choice X