Suppose STC(Q) = 2Q + 20.Short run marginal cost is

Question

Quizplus · Accepted Answer

Short run marginal cost (SMC) is the derivative of Short run total cost (STC) with respect to quantity. Therefore SMC(Q) = dSTC(Q)/dQ = 2. The level of output (Q) is not relevant for calculating the SMC, so option (A) is incorrect. Option (B) is the same as the fixed cost (20), which is not related to SMC. Option (C) is the same as the variable cost, but it does not consider the impact of quantity on the cost, which is captured by the SMC. Hence, option (D) is the correct answer.